Key Words: Michael Novogratz says there will be accusations and prosecutions for fraud in the crypto space

“ I think when all is said and done there will be accusations and prosecutions for fraud. ”

Michael Novogratz

Michael Novogratz, the Galaxy Digital founder and former Goldman Sachs banker, returned to CNBCs Squawk Box for a lengthy interview Thursday morning where he said he believes that many of the fraudsters working in the crypto space will be brought to justice although he didnt delve into specifics.

His latest warning about a reckoning for bad-faith players in the crypto space is not his first, but is perhaps his harshest yet. Since the spring, Novogratz has been saying that the crypto market has essentially lost the trust of the public, saying the current selloff isnt just a bear market in the traditional markets sense of the word but also a bear market in trust.

Now, following the collapse of the Luna algorithmic stablecoin (Novogratzs Galaxy Digital BRPHF, +6.21% was a backer) and the blowup of Three Arrows Capital, which has had a ripple effect across the crypto space, investors are running scared and waiting for the next shoe to drop.

The problem, Novogratz claims, isnt inherent to crypto itself but rather, is the result of disingenuous people who saw crypto as an opportunity to make easy money, and used leverage and deception to amplify their profits.