Coinbase CEO Brian Armstrong Says He’s ‘Puzzled’ That FTX’s Sam Bankman-Fried Isn’t ‘Really Taken’

FTX founder Sam Bankman-Fried should now be in custody, in connection with Brian Armstrong. Coinbase’s CEO said this week that it’s “confused to me why it’s not in custody already.”

“The Department of Justice or someone should be able to tell — just based on his public statements, I think there’s a very open and closed case about fraud,” Armstrong said at the a16z Crypto Founders Summit on Tuesday. He added, “I’m no expert on this, but the people I talk to seem to agree on that.”

Armstrong also asked why the media refrained from describing Bankman Fried as a criminal.

“I think we were all shocked to see the scale of fraud that happened at FTX. And let’s call it a scam. We have to call it what it actually is. It was very strange that the mainstream media didn’t really come out and say, ‘This guy is a criminal.’ They probably want to wait until He’s already being charged or something, and in custody. But it seems pretty clear at this point that that’s the case.”

FTX exploded spectacularly last month, surprising many in and outside the crypto sector. The $32 billion exchange has established itself as an industry leader, having enlisted sports stars like Tom Brady and other celebrities to boost its image. Its collapse shook confidence in the cryptocurrency sector and sparked calls for tighter regulation.

Bankman-Fried resigned as CEO of FTX on November 11, the same day the company, along with the trading arm of Alameda Research, filed for bankruptcy. One of the main accusations leveled against Bankman-Fried is that it used client funds from its cryptocurrency exchange to fund risky bets on Alameda Research.

Armstrong Coinbase, like FTX, is a cryptocurrency exchange. But while Bankman-Fried’s FTX is based in the Bahamas – where he reportedly enjoyed an extravagant penthouse lifestyle – Coinbase is a public company in the US.

“You can read our financials,” Armstrong said. “Audited by a third party, you don’t have to trust us. All client funds are segregated. We don’t invest any money from clients without their express direction.”

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People will go to jail

Armstrong wasn’t the only cryptocurrency mogul to share Bankman-Fried’s harsh views this week. Mike Novogratz, CEO of cryptocurrency firm Galaxy Digital Holdings, told Bloomberg TV on Thursday, “Sam and his colleagues have continued the scam. They used customer money to bet that he ‘mismanaged the risk’ after he made it.”

“The problem was that he took our money,” Novogratz added. “And so he needs to be sued. People are going to go to jail, and they should go to jail.”

Shares of Canada-listed Coinbase and Galaxy Digital both fell more than 25% last month, exacerbating an already harsh “crypto winter.” Coinbase shares are down nearly 80% this year, wiping out about $44 billion in value. “I actually think most companies wouldn’t exist,” BlackRock CEO Larry Fink said this week, referring to the beleaguered crypto sector.

Last week, Mark Cuban, the billionaire owner of the Dallas Mavericks and a prominent investor in the cryptocurrency space, told TMZ that Bankman-Fried should be concerned about jail time.

“I don’t know all the details,” he said, “but if I were him, I would be afraid to go to prison for a long time.” “It sure looks bad. I actually talked to the guy, and I thought he was smart, but boy, I had no idea he was going to take other people’s money, you know, and put it to his own personal uses. Yeah, that sure… looks like it happened.” .

Armstrong lamented the fact that the crypto sector attracts an overwhelming number of bad actors.

“We have to kind of come to terms as an industry with the fact that our industry attracts a disproportionate share of scammers and scammers. And that’s really unfortunate. It doesn’t mean it’s representative of the entire industry.”

This story originally appeared on Fortune.com

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