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Culture War Roundup for the week of December 12, 2022

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Sam Bankman-Fried has been arrested.

FTX founder Sam Bankman-Fried was arrested by Bahamian authorities this evening after the United States Attorney for the Southern District of New York shared a sealed indictment with the Bahamian government, setting the stage for extradition and U.S. trial for the onetime crypto billionaire at the heart of the crypto exchange’s collapse.

Bankman-Fried was expected to testify before the House Financial Services Committee on Tuesday. His arrest is the first concrete move by regulators to hold individuals accountable for the multi-billion dollar implosion of FTX last month.

There had been some speculation on when and even whether he would be arrested. Just yesterday someone told me to expect it to take two years. So, why right before tomorrow's hearing? And why not wait for him to give more interviews and provide more evidence?

Will everyone who said he would walk away Scot Free because he's in bed with NYT or Dems or whoever please adjust your priors or whatever?

Will everyone who said he would walk away Scot Free because he's in bed with NYT or Dems or whoever please adjust your priors or whatever?

Why? Hopes of him getting arrested fell after the MSM were running what could only be described as kids' gloves stories (if not outright puff pieces), giving ample cover for the "it was just a mistake" scam he was doing. The media is owned by powerful interests in any society, and so how they treat a person is often indicative of that person's social standing (which isn't the same as their financial muscle).

Even leading CEOs in the industry, like the guy running Coinbase, was publicly admonishing the media for going supersoft on him. The fact that many people are surprised over this development is a testament to the extreme deference he was shown.

Moreover, it wasn't just the media. It took the authorities a long time to get to this. They now claim it's a slam-and-shut case of fraud. Newsflash: it always was. So there was likely deliberation, otherwise he'd have gotten arrested weeks ago as his scam wasn't particularly sophisticated, as the SEC now acknowledges.

What made the scales to tip over, we'll never know. But I am not willing to bet that he will be persona non grata forever. He may be stupid in finance, but he's politically savvy. Look at someone like Michael Milken. He went to prison for securities fraud and has now re-invented himself as a benign political benefactor. SBF may still have a few cards to play, even if he gets indicted.