Reported by: Edward Helmore

Almost 14 years to the day since Madoff was arrested and charged with fraud in New York for orchestrating a long-running pyramid scheme, the FTX crypto scandal is being compared to Madoff’s criminal enterprise.

Diana Henriques, a financial historian and the author of The Wizard of Lies, a book delving into Madoff’s $64bn (£53bn) scheme, says the similarities between Bankman-Fried – or SBF as he is known – and the Wall Street investment manager are “striking”.

“The similarities between what we know of Madoff and what we know of Bankman-Fried is striking,” she said. “They are vastly different characters, but what is similar is this deliberate, eye-crossing complexity that would cause the average investor to just glaze over and say, ‘Well, I trust Bernie.’

“I see that same dynamic in how the client base viewed FTX. They really didn’t have a lot of solid evidence to support their trust, so it was – as with Bernie – a leap of faith. You trust the central character and that short-circuits a lot of the steps that, in hindsight, are the obvious due diligence you would do, and that is amazing[ly] similar.”

“The most essential gift of a con man is that they can inspire trust that never wavers, even in the face of red flags and worrisome details. You can’t look at FTX as anything but a massive leap of faith by a lot of people who should have known better,” Henriques said.

Read full report: https://amp.theguardian.com/business/2022/dec/17/sam-bankman-fried-bernie-madoff-fraud-ftx