Sunday, February 25, 2024

Wednesday Briefing: McCarthy Ousted, Sam Bankman-Fried Trial Begins

HomeTop NewsWednesday Briefing: McCarthy Ousted, Sam Bankman-Fried Trial Begins

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House Speaker McCarthy Ousted in Historic Revolt, Plunging Congress into Crisis

In an extraordinary rebuke, Kevin McCarthy was removed as Speaker of the U.S. House of Representatives yesterday in a 216–210 vote engineered by hardline conservatives in his own Republican party. This is the first time in modern history a Speaker has been ousted mid-term, throwing Congress into turmoil.

The revolt was led by Florida Representative Matt Gaetz and other right-wing GOP lawmakers who were angry over McCarthy’s decision to work with Democrats last weekend to pass a temporary spending bill. Their motion to vacate the speakership ultimately succeeded, even as McCarthy pleaded with Republicans to maintain party unity.

The vacancy now paralyzes the House until a new Speaker is chosen, grinding legislative business to a halt. Experts say operations like passing spending bills to keep government running cannot proceed until the speakership is filled.

How the Historic Ouster Unfolded

Tensions between McCarthy and the right-flank of his party boiled over on the House floor Tuesday afternoon. Gaetz introduced the resolution to dump McCarthy as Speaker, citing his “failure to present a compelling vision” and reliance on Democrats to raise the debt ceiling as reasons he was unfit to lead.

This set the stage for a raucous floor fight, with McCarthy defending his record as other Republicans took turns bashing his speakership as short-sighted and weak. “The American people did not vote for our party to be impotent,” said Florida Rep. Byron Donalds.

Meanwhile Democrats sat back quietly, offering no lifeline to the embattled GOP leader. When the roll call vote commenced, nearly 20 Republicans joined the hardliners to finalize McCarthy’s removal.

Fallout from the Speaker’s Debacle

McCarthy’s ouster plunges the House into uncharted territory. The speakership is second in line to the presidency and vital for House operations. No clear successor for McCarthy has emerged, setting up a chaotic battle to fill the vacuum.

With the House frozen, the government now faces risks of shutdowns if funding bills can’t pass before November 19. “Legislatively, the House is offline,” said congressional historian Julian Zelizer of Princeton University. “Getting a new speaker will be very divisive for Republicans.”

The disarray also casts doubts on the GOP’s ability to govern. McCarthy made concessions to far-right members to gain their votes in January’s speaker election. “This is what he got for the bargain,” said former Rep. Tom Davis (R-Va.). “It’s a lesson that you’ve got to heal the wounds or they’ll fester.”

FTX Founder Sam Bankman-Fried Faces Fraud Charges as Trial Opens

Former FTX CEO Sam Bankman-Fried arrived in court Tuesday for the start of his criminal trial on charges he defrauded investors and customers out of billions at the now bankrupt cryptocurrency exchange.

Jury selection kicked off the highly anticipated proceedings in Manhattan federal court. Opening arguments are slated for Wednesday, beginning a trial that could last up to eight weeks.

The 31-year old Bankman-Fried faces seven counts ranging from securities fraud to money laundering that could result in a maximum prison sentence of 115 years if convicted. He has pleaded not guilty.

Prosecutors are expected to argue Bankman-Fried knowingly swindled FTX customers by illegally diverting their deposits to his hedge fund Alameda Research. They say he operated FTX like a Ponzi scheme.

But Bankman-Fried is likely to contend that any financial maneuverings were done in good faith without intending harm. He has previously blamed “messy accounting” for monies flowing between his companies and suggested he was unaware funds were being co-mingled.

Crypto World Eager to See Justice Served

The crypto community will be watching closely as its fallen “white knight” stands trial. Many feel the viability of digital currencies hinges on seeing consequences for Bankman-Fried’s actions.

“This case is enormously important for the industry,” said attorney Rebecca Rettig of FisherBroyles. “If Bankman evades accountability, it could undermine faith in crypto markets.”

Bankman-Fried rode a wave of celebrity status as FTX grew to become the second largest crypto exchange. But its collapse wiped out billions in customer funds, sparking criminal probes and Congress to call for stricter regulation.

Most crypto leaders are now racing to distance themselves from any past associations with Bankman-Fried. They hope the trial will demonstrate digital currencies can operate transparently within the law.

For crypto to shed its reputation as the “Wild West,” many agree Bankman-Fried must face justice. “I want him crushed,” said CEO Changpeng Zhao of rival exchange Binance.

The months-long proceedings promise courtroom drama as prosecutors aim to prove the dizzying fraud. Ironically the trial may end up helping mature the industry Bankman-Fried is blamed for tainting.

Key Takeaways: Chaos in Congress, Crypto on Trial

In a historic move, Kevin McCarthy was removed as House Speaker Tuesday by both Democrats and hardline Republicans upset over his leadership.

The speakership is now vacant, stopping all legislative business until a replacement is found. It marks uncharted territory that risks government shutdowns.

The stunning rebuke of McCarthy highlights frictions within the Republican party that may hobble their ability to govern.

Meanwhile trial opened Tuesday for FTX founder Sam Bankman-Fried, accused of swindling billions from the now bankrupt crypto exchange.

The crypto industry is eager for justice to be served and to distance itself from the disgraced Bankman-Fried.

His trial may help impose accountability on crypto markets and allow digital currencies to gain mainstream acceptance.

The events of this week mark huge upheavals within politics and cryptocurrency that may shape their futures for years to come. Follow our continuing coverage as these stories unfold.

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Mezhar Alee
Mezhar Alee
Mezhar Alee is a prolific author who provides commentary and analysis on business, finance, politics, sports, and current events on his website Opportuneist. With over a decade of experience in journalism and blogging, Mezhar aims to deliver well-researched insights and thought-provoking perspectives on important local and global issues in society.

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