CME Group CEO called Bankman-Fried ‘an absolute fraud’

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“When you have the greatest quarterback of all time and a supermodel wife doing a commercial picking up the phone saying ‘Are you in, are you in, are you in.’ To me, it looks like a pump-and-dump scheme. People get very influenced by people like Tom [Brady].” ~ Terry Duffy, CME Group Chairman and CEO

FTX’s sudden and catastrophic collapse sent reverberations throughout the entire cryptocurrency industry. What was once the third-largest cryptocurrency exchange has filed for bankruptcy and has billions of dollars left in limbo.

FTX is a cryptocurrency exchange headquartered in the Bahamas. The exchange allowed users buy, sell, hold, and trade cryptocurrency (although those functions are currently unavailable due to the firm’s collapse as a result of FTX founder and CEO Sam Bankman-Fried’s fraud and misappropriation of its customers’ accounts), writes The Verge.

CME Group Chairman and CEO Terry Duffy suspected the fraud at the cryptocurrency exchange the day of his first one-on-one meeting with Bankman-Fried, stated during an interview with Melissa Lee on CNBC Fast Money.

Duffy recounted his March 2022 meeting with Bankman-Fried on the “On the Tape” podcast, which is hosted by “Fast Money” traders Guy Adami and Dan Nathan.

“You’re a fraud. You’re an absolute fraud,” Duffy said he told Bankman-Fried. Moreover, he tried to warn Congress and the financial sector that the disgraced FTX billionaire Bankman-Fried was a “fraud.”

Additionally, Duffy wanted to know why the Commodities Futures Trading Commission was even considering Bankman-Fried’s request to ease regulatory rules to push his trading model. He was told it was required under innovation guidelines.

“Right away my suspicions were up,” Duffy said. “Why is there so much pressure coming for this application? And then when I met with him, I knew right away this a joke.”

The FTX collapse is the biggest cryptocurrency exchange bankruptcy on record.

Duffy alleges that a former senior executive of the Commodity Futures Trading Commission (CTFC) was closely aligned with Bankman-Fried. “I hope someone has the courage to ask, ‘Was anybody putting pressure on the CFTC to move forward with an application that could have put everything at risk?’” Duffy said.

The former CEO Bankman-Fried is facing a barrage of civil and reportedly criminal investigations after allegedly transferring billions in customer funds from FTX, the crypto trading platform he founded in 2019, to Alameda Research, a crypto trading firm he founded in 2017.

References:

  1. https://www.cnbc.com/2022/11/23/absolute-fraud-cmes-terry-duffy-says-he-saw-trouble-before-ftx-collapse-.html
  2. https://www.foxnews.com/media/sam-bankman-fried-easy-pick-out-fraud-cme-group-chief-terry-duffy

“Any time there is a boom cycle like this, otherwise smart investors do dumb things because they see their pals and peers piling in and worry they will be left out. Envy is a pernicious quality — and one that is all too human.” ~ Andrew Ross Sorkin

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