The crypto trap and Wirecard scandal – Criminal machinations in business

By Volker Wasmuth (2025)

Film Review

The first half of the documentary concerns the collapse of the cryptocurrency platform FTX (which prior to its demise was worth more than Deutsche Bank) and the arrest and conviction of its founder/CEO Sam Bankman Fried for fraud and money laundering.

FTX had its headquartesr in the Bahamas and operated one of the world’s largest cryptocurrency trading platforms. It enabled clients to trade and swap Bitcoins, Etherium, Solano and other cryptocurrencies.

After obtaining a physics degree at MIT, Bankman Friend worked for James Street financial for three year before starting FTX in 2015. The main way he secured the platform’s wealth was to buy Bitcoins in the US and resell them in Asia, where they had a 5-10% higher value.

After three years FTX was the world’s third largest crypto platform, with one million clients. By 2021 it was doing $20 billion in daily trades for mainly high volume users,

Following the collapse of FTX in 2022, it came out Bankman Fried had used FTX funds to buy $120 billion worth of of property in the Bahamas for himself, his parents and key FTX managers. He also used FTX funds to donate $40 million (directly) to the Democratic party and $19 million via surrogates. This was in addition to using FTX funds to shore up his girlfriend’s failing hedge fund.*

In all he “borrowed” $8 billion of client assets for personal use. As reserves dropped, clients tried to make withdrawals FTX couldn’t cover and the company was forced to declare bankruptcy. Three hundred employees lost their jobs and one million client lost fund they held on the platform.

Bankman Friend was arrested in the Bahamas and extradited. In 2024, he was found guilty of fraud and embezzlement and sentenced to 25 years in prison.

The second half of the film concerns the collapse of the German payment processing company Wirecard in 2020 and the disappearance of their COO John Marsalek. The latter is believed to have link with a Russian secret service spy ring that spied on journalists critical of Germany’s US military bases. Maralek was allegedly paying them off with Wirecard funds.

On June 18, 2020 auditors refused to sign off on falsified documents related to $1.9 billion dollar in Wirecard expenditures. When this news became public, the shares tanked and Marsalek fled to Russia.

*The film makes no mention of Bankman Fried using FTX to launder US aid to Ukraine into Democratic Party donations see Failed Crypto Exchange FTX Was a Ukraine Money Laundering Op