Mike Novogratz Says Sam Bankman-Fried is Delusional, Should be in Jail

Billionaire investor Mike Novogratz does not buy Sam Bankman-Fried’s excuses for the FTX collapse.

Sam Bankman-Fried, Mike Novogratz
  • Novogratz said Sam Bankman-Fried committed fraud
  • Galaxy Digital had $76.8 million on FTX

Novogratz reacted to Sam Bankman-Fried’s Wednesday interview at The New York Times DealSummit.

In an interview on Wednesday, Galaxy Digital CEO Mike Novogratz called the former FTX CEO’s interviews “the theater of the absurd.” He went on to say that Bankman-Fried committed fraud and should be in jail.

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"It was delusional, let's be really clear. Sam is delusional in what happened and his culpability in it,” Novogratz said.

Bankman-Fried gave a series of interviews since the FTX collapse. The former CEO of the major exchange said that he did not knowingly commingle the funds of FTX users and the funds of his trading firm Alameda Research. Alameda’s losses eventually brought down Bankman-Fried’s entire crypto empire.

"There's a lot of narcissism there and grandiosity," said Novogratz. "He will be prosecuted and he 0:40 Will spend time in jail."

The former FTX CEO insisted that the collapse came due to poor corporate controls and a failure in risk management. Novogratz disagreed, saying that Bankman-Fried “stole” the money. “I should have risk-managed the stolen money better,” Novogratz jokingly said.

"And it wasn't just Sam. You don't pull this off with just one person," he added. "I'm hoping that the authorities get to the bottom of this. Of this faster and not just for the sanctity of the crypto markets, but for all markets."

Galaxy Digital was among the companies that had its funds locked in FTX. The investment firm disclosed a $76.8 million position in FTX’s accounts.

Novogratz was hit hard by the crypto winter. The crypto billionaire’s net worth was $8.5 billion at the height of the crypto market. By September, it was down to $2.1 billion.

Ackman, O’Leary Buy Sam Bankman-Fried’s Story

Not all investors agree with Novogratz on FTX and Bankman-Fried. Billionaire investor Bill Ackman reacted to the interview differently.

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“Call me crazy, but I think @sbf is telling the truth,” Ackman tweeted. Investor and former paid FTX spokesperson Kevin O’Leary jumped at the opportunity to agree with Ackman.

“I think you’re crazy on this one,” Novogratz replied to Ackman. Dogecoin founder Billy Markus jokingly pitched a doubling scheme to Ackman and an exchange to O’Leary.

On the Flipside

Novogratz himself is not immune from making poor judgments in crypto. The billionaire invested heavily in now-bankrupt Terra-Luna and even got a Luna tattoo.

Why You Should Care

Novogratz is an influential investor, especially in the crypto space.

Read about the billionaire’s prediction for the crypto markets:
It May Take a While, but Bitcoin Will “Lead the Markets” in Recovery – Mike Novogratz

Read about Sam Bankman-Fried’s take on the FTX collapse:
‘I Did Not Knowingly Commingle Funds’ FTX’s Sam Bankman-Fried Claims

This article is for information purposes only and should not be considered trading or investment advice. Nothing herein shall be construed as financial, legal, or tax advice. Trading forex, cryptocurrencies, and CFDs pose a considerable risk of loss.

Author
David Marsanic

David Marsanic is a journalist for DailyCoin who covers the intersection of crypto, traditional finance, and government. He focuses on institutionalized crypto entities like major cryptocurrency exchanges and Solana, breaking down complex topics into easy-to-understand writing. David's prior experience as a business journalist at various crypto and traditional news sites has enabled him to maintain a critical approach to news while adhering to high journalistic integrity standards.