Sam Bankman-Fried’s Connections to Prominent Figures
In the months leading up to the collapse of FTX and his subsequent arrest, Sam Bankman-Fried, the disgraced crypto boss, maintained regular communication with influential political and financial figures in New York City.
For instance, in March 2022, Bankman-Fried had dinner with New York City Mayor Eric Adams at Osteria La Baia, an Italian restaurant near the Museum of Modern Art. This restaurant is known for being a preferred late-night meeting spot for the mayor. Although the meeting was confirmed by the mayor’s public schedule, the details of their discussion were not disclosed.
Furthermore, in September 2022, Bankman-Fried had plans to meet with New York Governor Kathy Hochul at The Capital Grille steakhouse. This choice of venue was unconventional given Bankman-Fried’s vegan lifestyle.
The prosecution presented selected emails that highlighted the high demand for Bankman-Fried’s presence and insights before the collapse of FTX. Investment firms associated with George Soros and Morgan Stanley sought access to group dinners organized to engage with him.
Special Agent Richard Busick testified that Bankman-Fried’s schedule was filled with high-profile encounters. He would attend photoshoots with Forbes and have appointments with influential figures such as Saudi Arabia’s finance minister and the head of its sovereign wealth fund.
All of Bankman-Fried’s engagements were meticulously coordinated by his personal assistant, Natalie Tien.
New York Mayor’s Support for Crypto
Mayor Eric Adams has shown enthusiasm for cryptocurrencies. He even received his first mayoral paycheck denominated in Bitcoin and Ether, although he immediately converted it into U.S. dollars. Adams has expressed interest in establishing New York City as a prominent crypto hub.
However, New York is one of the few states that require businesses engaged in transmitting fiat currency and virtual currency to hold both a BitLicense and a traditional money transmitter license. The state also mandates examinations to ensure compliance with know-your-customer and anti-money laundering rules.
The New York State Department of Financial Services (NYSDFS) has introduced several new rules for crypto companies following the collapse of FTX. Earlier this year, the regulator released guidance that requires companies to separate their own crypto assets from customer funds. In addition, the NYSDFS passed a law in April that mandates assessment fees for companies holding a BitLicense, aligning digital asset firms with insurance and banking companies.
Hot Take: NYC’s Crypto Connections
Sam Bankman-Fried’s extensive connections with influential figures in New York City highlight the intersection of cryptocurrency and politics. The meetings with Mayor Eric Adams and Governor Kathy Hochul demonstrate the growing interest in cryptocurrencies among political leaders.
While Mayor Adams expresses enthusiasm for establishing New York City as a crypto hub, the state’s regulatory framework presents challenges for crypto businesses. The requirement for both a BitLicense and a traditional money transmitter license, along with ongoing examinations, adds complexity to operating in New York.
The introduction of new rules by the NYSDFS reflects efforts to address issues revealed by the collapse of FTX, such as fund co-mingling. However, these regulations also place digital asset firms on par with insurance and banking companies when it comes to assessment fees.
The evolving relationship between cryptocurrencies and government institutions underscores the need for continued dialogue and collaboration to strike a balance between innovation and regulatory oversight in the crypto space.
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