Ira Lee Sorkin, who previously represented Bernie Madoff, discusses why it will not likely work for FTX founder Sam Bankman-Fried to blame the collapse of the exchange on the lack of regulatory clarity in the crypto industry.
There's no regulation that says you are permitted to misrepresent information to investors. There's no regulation that says you can say whatever you want to investors, even if it's not the truth, there's no regulation that says do whatever you want with investors money. You can go back from the time that the SEC was created in the 19 thirties where there was no regulation, but there was still many instances of lies and misrepresentation and fraud and omissions of material facts to those people getting involved in institutions or trading that they didn't understand and you don't really have to understand it. If you make a misrepresentation, you don't have to have a knowledge of crypto. You don't have to have a knowledge of how it all works. What regulation is in the statutes. You can't lie, you can't omit information. You can't make representations that are false, forget whether it's crypto or something else. OK? Selling cars. You can't lie about the odometer. You can't lie about the engine which they'll tell you maybe is a Cadillac engine, but they put a Chevrolet engine into it. It's across the board. The statutes are structured that keep people from being told falsehoods.