Opinion: Sam Bankman-Fried’s case is a new version of an old story — and perhaps the beginning of change

Editor’s Note: Casey Michel is a writer and investigative journalist covering kleptocracy and dark money networks across the globe. He is the author of “American Kleptocracy: How the US Created the World’s Greatest Money Laundering Scheme in History,” and is at work on a book investigating foreign lobbying in Washington, DC. The opinions expressed in this article are his own. Read more opinion at CNN.

CNN
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On Tuesday, prosecutors from the Southern District of New York unsealed an indictment that revealed eight criminal charges against former FTX head Sam Bankman-Fried, including wire fraud and several counts of conspiracy. And the Securities and Exchange Commission (SEC) charged him with defrauding customers and investors.

Officials allege that Bankman-Fried, 30, spent years lying about the financial health of FTX, a crypto exchange which collapsed in November in one of the most spectacular financial implosions in years. Bankman-Fried is currently in the Bahamas, where FTX operated from, and is awaiting an extradition hearing.

The entire fiasco is completely unsurprising, and in many ways could have been foreseen — as indeed some did. After all, this is hardly the first case of alleged fraud we’ve seen from a figure like Bankman-Fried. And, as opposed to what any lawyer would advise, SBF, as he is commonly known, didn’t remain silent. He went on an apology tour, tweeting, speaking to reporters and even virtually participating in the yearly DealBook Summit in New York last month where he said he “didn’t ever try to commit fraud on anyone.”

In some ways, these kinds of cases, many of which resemble traditional Ponzi schemes, are as old as American capitalism itself. They almost always pair a lack of regulation and oversight with promises of easy wealth schemes, all predicated on some kind of proprietary technology that seems to generate returns out of thin air.

Just look through American history, and the same story repeats itself, over and over. In America’s initial “Great Depression,” the Panic of 1873, speculative investors operating without any oversight in the railroad industry effectively crashed the American economy, leading to spiraling bank failures and widespread destitution.

A half-century later in the late 1920s, the crash of the stock market — which more…