Experts say that SBF could probably go to jail for misusing cryptocurrency funds, but now the focus is on his political donations.
Before the FTX crash in the first week of this November Sam Bankman-Fried earned news for his contributions to the U.S. Midterm Election.
Actually, the former CEO and founder of FTX, SBF, was reportedly the third largest contributor overall and the top donor from the cryptocurrency industry.
According to XRP attorney John Deaton, SBF’s arrest is inevitable. In his opinion, SBF will end up in prison eventually, the question is only when.
Deaton added in his recent statement that FTX may contact creditors who received money from the company within the last 90 days before it went bankrupt. This may open the door for preference claims against all political SBF recipients.
“Anybody or any entity that received funds in the 90 days before FTX filed for bankruptcy can be hit with a preference claim. This also could include customers who withdrew $5B from FTX before it filed for bankruptcy.”
Additinally, Deaton previously said that The BlockFi contract was also dishonest because SBF required funds be retained on FTX, which he diverted to “loan” to Alameda or make other acquisitions or political payments.
Political Donations From SBF To Be Considered Fraud?
As an additional option, “fraudulent transfer claims” can also be filed against the political beneficiaries. He also tweeted that it might be necessary to recover the SBF political contributions because they constituted fraudulent transactions.
After hearing that SBF and FTX donated $70 million to various candidates for the elections just before declaring bankruptcy, the XRP attorney made the above comments.
All cryptocurrencies, which were already suffering in the bear market, had their value drastically drop after the FTX collapse. Several digital currencies hit all-time lows in the last two years as a result of the FTX’s contagion effect.
Companies like Blockfi, which is near to its collapse, and Genesis, which has ceased issuing withdrawals in response to the latest FTX issue, are just two instances of the many that are struggling as a result of the turmoil.