Editorial | Crypto-currency proved great vehicle for latest financial scam | Editorials

What a party, but nothing lasts forever.

So quick has been the dramatic fall of alleged cryptocurrency scam artist Sam Bankman-Fried that it’s easy to understand why he is having trouble coming to grips with his new reality.

How else can one explain Bankman-Fried’s request to be released from police custody in the Bahamas because the jail where he’s being held doesn’t serve his special vegan diet?

Obviously, that would be a burden to anyone so fastidious about food consumption. At the same time, it’s the least of Bankman-Fried’s problems. There’s also the prison itself — known as Fox Hill.

It’s described as grim due to “overcrowding and poor ventilation,” and that’s just in the Bahamas.

Although the celebrated defendant and campaign donor is fighting extradition, it won’t be long before he’s back in the United States to answer a multitude of criminal charges that foreshadow much misery ahead.

Although Bankman-Fried himself is a guru of crypto and deep-pocketed do-gooder, the charges against him are nothing new. He’s — allegedly — Bernie Madoff with curly hair and shorts, a fast-talking, self-aggrandizing, super-woke charmer who’s said he wants to do good while helping himself to investors’ money.

The news media, of course, ate up the hype, as Bankman-Fried hobnobbed with celebrities and Democratic politicians.

Reporters should have taken a deeper look at this pied piper’s ploy. They might have stumbled over evidence of one of the biggest financial frauds in history — an alleged $8 billion ripoff of supposedly sophisticated investors who went gaga over a newfangled moneymaker called “cryptocurrency,” the digital financial instrument backed by nothing but hot air.

Bankman-Fried’s company — crypto-exchange FTX — represented the front door of what the company’s new caretaker called “old-fashioned embezzlement.” What came in was funneled through to Alameda Research, the Bankman-Fried crypto-hedge fund that sprayed investor money in all directions.

Authorities allege Bankman-Fried used the hedge fund as — where have readers heard this before? — his “personal piggy bank.” He bought real estate, lavished millions of dollars on liberal politicians and made private investments.

One particularly amusing abuse involved, The Wall Street Journal reported, taking “enormous loans” in which he was “both the borrower in his individual capacity and the lender in his capacity as CEO of Alameda.”

It eventually came tumbling down in a bankruptcy mess that requires thorough investigation and, perhaps, a claw-back of cash from those who benefited from Bankman-Fried’s manipulative generosity.

There’s a whole lot more to this story. At the center is an ego-driven and probably disturbed 30-year-old MIT graduate. He was selling quick riches — the oldest story in financial chicanery, one too good to be true.