Analys: Vittne i FTX-rättegång erkände bedrägeri | NTD NYHETER

Kevin Stockland, thank you so much for joining us. Great to have you back on the show. Tiffany, thanks for having me on. The disgraced FTX founder, Sam Begman-Fried's trial is ongoing. Today we had the former Alameda CEO, Carolyn Ellison, testifying. Give us a sense of what her testimony included. How damning was it? It's going to be pretty challenging for the defense. She is essentially testifying that she's admitted that she's committed securities fraud, and she's saying that she did so at the direction of Sam Begman-Fried, who is ultimately the owner of Alameda Research. And right now the headlines are dominated by the war happening in Israel following the brutal surprise attack by Hamas over the weekend. How significant is this trial? Why should people pay attention to it? Prior to that, I think this trial is fairly trivial. A lot of what's being discussed currently is a little bit soap operish. However, there are some big issues that people should keep in mind all the same. The one is that Sam Begman-Fried was the largest donor to President Biden's election campaign. He was the second largest donor to the Democratic Party in the midterms, and this includes a lot of people who would be regulating and passing laws to regulate the crypto industry. And secondly, it has to do with the crypto industry at large, why people are choosing to invest here. So these issues do make this important, although, you know, compared to the tragic events in the Middle East, I think it's fairly trivial. I want to zoom in on the political donations. In this trial so far, has that come up? It hasn't. It has not at all. This has all been about the issue of the case that they're trying to press for securities fraud. However, there will likely be a follow on case. Charges are pending for his political donations and the fact that they may have been illegal or illicit. So there hopefully should be some follow on trial. And then we'll have a little bit closer examination of who received money from Sam Begman-Fried and how they are tied into the crypto industry. And on that note, what is the significance of his political donations? Well, some of his largest donations went to people on Senate and House committees who actually have recently introduced legislation to regulate the crypto industry. He's also reported to have had a private meeting with Gary Gensler, who runs the Securities Exchange Commission. And as I mentioned, he is the largest donor to the Biden election campaign. So he was buying a lot of influence with some key people who are in charge of regulating the crypto market. And those sums add up to more than 100 million dollars in total. That's a lot of money we're talking about. And Kevin, you also mentioned the crypto sector more broadly. It seems one of the big appeals of the crypto market was its separation from the government. Given this trial right now, how likely are we to see more government regulation in this sector going forward? Absolutely. And so this is a huge background issue to all of this. You know, a lot of people invest in crypto just to get rich and for speculation. But for a lot of people, this is a way to escape the government. It's a way to escape inflation so they can have some investment that holds its value in a time of 5 to 9 percent inflation that we've had over the last couple of years. But it's also a way to escape government surveillance of transactions, which is increasing through banks. So this trial, even though this is kind of a classic case of fraud, according to the allegations, it looks more like Bernie Madoff than anything to do with crypto. This is going to be used as a justification for the government to extend its authority and its control over the crypto market. The government is very unhappy with transactions that go on outside of its control. And in terms of this trial, what is next? Where is this going? Well, so last week we had testimony from Gary Wong, who basically talked about the infrastructure that would set up fraud to occur at FTX. This week has been Caroline Ellison, who has given the perspective from Alameda Research and the misuse of funds and the taking of funds from FTX for FTX for Alameda Trading, some of which she said was actually lent out to Sam Bankman Freed and other executives directly and used for political donations. So we'll certainly be hearing more about that. And then I expect we'll have more executives who have been granted not immunity, but an easier ride in the in the sentencing process. I think we'll be hearing more testimony from them. Kevin Stockland, thank you so much for your time. My pleasure. Thank you.