Sam Bankman-Fried arrested hours before his scheduled congressional testimony.
Published on 12.12.2022
Instead of answering awkward questions from members of Congress about how cryptocurrency exchanges work via video from the Bahamas on Tuesday, it looks like Sam Bankman-Fried (SBF) will instead prepare to respond to federal charges brought by the US government. .
The Bahamas Attorney General announced late Monday that the Royal Bahamas Police have arrested Bankman-Fried, the founder and former CEO of cryptocurrency firm FTX whose career imploded along with his company following numerous fraud allegations that sent FTX into bankruptcy.
Former FTX CEO Sam Bankman-Fried has been arrested in the Bahamas.
“SBF’s arrest followed the receipt of official notification from the United States that they have filed criminal charges against SBF and will likely seek his extradition,” the Bahamas AG said. “Because of the notification received and the material provided therewith, it has been deemed appropriate for the Attorney General to seek the arrest of SBF and hold him in custody pursuant to our nation’s extradition law. »
The attorney general said his government will now await Bankman-Fried’s formal extradition request to the United States to deal with the charges, and “intends to process it expeditiously, in accordance with Bahamian law and its treaty obligations with the United States.
Philip Davis, Prime Minister of the Bahamas, said his country “and the United States have a common interest in holding accountable all individuals associated with FTX who may have betrayed the public trust and violated the law. While the United States pursues criminal charges against SBF individually, The Bahamas will continue its own regulatory and criminal investigations into the collapse of FTX, with the continued cooperation of its law enforcement and regulatory partners in the United States and elsewhere,” he added.
The timing of the arrest is potentially convenient for Bankman-Fried, at least in the short term – the disgraced former CEO was due to appear via video from the Bahamas before the House Financial Services Committee on Tuesday after agreeing to testify at the of the hearing seeking more information about the collapse of FTX. Bankman-Fried had been reluctant to testify, but eventually said Friday he would take questions from lawmakers.
The arrest by authorities in the Bahamas comes as reports surfaced of the US working to build a case against Bankman-Fried, with Mashable noting on Sunday that “US federal prosecutors would very much like to know what happened as well. in addition to Capitol lawmakers, “which is why there are now multiple investigations into FTX and its founder over allegations of fraud, manipulation, and more.”
As Mashable summarizes events since the FTX implosion:
It has now been a month since FTX filed for bankruptcy. What was once one of the largest cryptocurrency exchanges in the world collapsed within days after reports surfaced that its affiliate hedge fund, Alameda Research, was using funds from FTX clients to transact and was in fact insolvent.
Billions of dollars of customer money are lost and billions more are missing. So one wonders why Sam Bankman-Fried, the founder – and, until the collapse, the CEO – of FTX, is still a free man. The way SBF and FTX employees ran the business likely complicates investigations.
“Never in my career have I seen such a complete failure of corporate controls and such a complete absence of reliable financial reporting as here,” said new FTX CEO John Ray III, appointed after the bankruptcy. It should be noted that Ray is the same person who was named after Enron went bankrupt in 2001.
SBF has also been very public with its version of events, sitting down for numerous interviews with mainstream media and even crypto advocates in Twitter spaces. SBF claims that he did nothing wrong and that the collapse of his crypto empire was simply due to poor business decisions on his part and that of his company.
Although critics have pipped holes in SBF’s claims, it looks like we will soon officially find out more about the alleged criminal activity in which SBF allegedly took part.
Now that Bankman-Fried is in custody in the Bahamas, where his extradition is being prepared, it appears his media tour is coming to an end and he needs to focus on defending himself against allegations of fraud and other illegal acts hanging over him. him.
According to United States Attorney Damian Williams of the Southern District of New York, the government plans to release the charges against Bankman-Fried on Tuesday morning.