“I don’t know all the details, but if I were him, I’d be scared of going to jail for a long time,” billionaire Dallas Mavericks owner he told TMZ. “It sure sounds bad. I actually talked to the guy and thought he was smart, but boy, I had no idea that he would, you know, take other people’s money and use it for his own use. Yes, of course… it looks like what happened.
US cryptocurrency investors sued Bankman-Fried earlier this month, claiming the mop-haired 30-year-old — along with the celebrities he’s enlisted — engaged in deceptive practices. Class action lawsuit alleges cryptocurrency exchange FTX targeted “unsophisticated investors from across the country” and its interest-bearing accounts were unregistered securities illegally sold in the US, where it claims investors suffered harm for 11 billion dollars.
US authorities are investigating FTX after its spectacular implosion and bankruptcy earlier this month rocked confidence in the struggling cryptocurrency industry and fueled fresh calls for tougher regulation.
Also in the lawsuit are NFL legend Tom Brady, NBA star Steph Curry and Seinfeld co-creator and Curb your enthusiasm starring Larry David, who appeared in commercials for exchanging cryptocurrencies (a Super Bowl commercial in David’s case). FTX has become a sports marketing heavyweight in his quest to build trust in his brand, by purchasing the naming rights to the NBA’s Miami Heat stadium.
Former Treasury Secretary Larry Summers cited the stadium deal while comparing the collapse of FTX to the Enron scandal: “Not only financial blunder but – certainly from the reports – hints of fraud. Stadium names very early in a company’s history. Vast explosion of wealth that no one quite understands where it comes from.
“A lot of mistakes” in cryptocurrency
However, Cuban still believes in the potential of cryptocurrencies.
“It separates the signal from the noise,” he said. “There have been a lot of people who have made a lot of mistakes, but that doesn’t change the underlying value.”
Commenting on the collapse of FTX and other exchanges earlier this month, Cuban tweeted:
“These explosions weren’t cryptocurrency explosions, they were banking explosions. Loans to the wrong entity, incorrect valuations of collateral, arrogant arbitrage, followed by executions of depositors. See Long-Term Equity, Savings and Loans, and Subprime Magnification. All different versions of the same story.
It also has shared thoughts on Bankman-Fried at a conference organized by Sports Business Journal this month by saying:
“First, you have to understand cryptography. There are speculations – this is all the noise. Then there are things that happened with [crypto platform] Voyager and with FTX now: He’s someone who runs a company that’s just as stupid as fucking greedy. So what does Sam Bankman do? He just… give me more, give me more, give me more… so I will borrow money, lend it to my affiliate company, and hope and pretend to myself that the FTT tokens that are there in my balance sheet uphold their value.