Former FTX CEO Sam Bankman-Fried arrested in Bahamas

Appears to be like like embattled FTX CEO Sam Bankman-Fried will not be testifying earlier than Congress in any case. The Bahamas Legal professional Basic’s Workplace announced Monday that Bankman-Fried has been arrested and is more likely to be extradited in brief measure again to the US to face trial. The AG’s workplace famous that his arrest got here after, “receipt of formal notification from america that it has filed prison costs in opposition to SBF and is more likely to request his extradition.”  

The information of his arrest ought to come as little shock provided that last Friday the Department of Justice came out and said that it was “closely” examining his position within the multi-billion cryptocurrency exchange’s recent collapse, which is anticipated to hurt greater than 1,000,000 particular person buyers. Justice Division officers made these statements whereas assembly with the crypto alternate’s bankruptcy team to debate whether or not FTX had improperly moved hundreds of millions of dollars simply forward of its declared chapter final November.

Bankman-Fried was scheduled to testify earlier than Congress on the Home Monetary Companies Committee on Tuesday. Nevertheless, as United States Legal professional Damian Williams defined in a Tweet Monday, Bankman-Fried has been taken into custody “based mostly on a sealed indictment,” which will probably be revealed and defined within the morning.

“Clearly, I made a variety of errors. There are issues I’d give something to have the ability to do over once more,” Bankman-Fried just lately tried to elucidate to the New York Times. “I didn’t ever attempt to commit fraud on anybody.” 

The Bahamian authorities can also be being accused of collusion — not by the DoJ, however quite FTX itself. Attorneys for the corporate asserted on Monday (forward of the arrest information) that the Bahamas as a governing entity had colluded with Bankman-Fried to assist transfer the ill-gotten funds from all these suspicious transactions that befell proper earlier than chapter into crypto-wallets managed by Bahamian regulators.  

Bankman-Fried stepped down from his position of CEO at FTX in November and was changed by John J. Ray III, an government who was additionally helmed Enron by way of its personal chapter proceedings. In his prepared remarks for Tuesday’s now-postponed congressional hearings, Ray painted a bleak image of FTX’s late stage administration and operations. 

In it, he says that FTX went on a $5 billion spending spree in late 2021 and early 2022, “shopping for a myriad of companies and investments, lots of which can be value solely a fraction of what was paid for them,” in addition to making quite a few loans and funds amounting to greater than $1 billion, “to insiders.” These funds have been additionally co-mingled with cash from Bankman-Fried’s different enterprise Alameda Analysis, which additionally used shopper funds to interact in high-risk margin buying and selling.

Relying on what the Southern District Legal professional’s workplace unseals tomorrow, Bankman-Fried could possibly be going away for a really very long time. Wire and financial institution fraud on this scale, per a CNBC authorized panel, would put Bankman-Fried in jeopardy of life with out parole. Former Theranos CEO Elizabeth Holmes and COO Sunny Balwani simply obtained 11 and 12 years in jail, respectively, for his or her roles within the medical firm’s huge fraud case. Ponzi Scheme king Bernie Madoff obtained 150 years for his shenanigans in 2009, and in 2006, Jeff Skilling was handed 24 years for his position in Enron’s downfall.  

All merchandise really useful by Engadget are chosen by our editorial crew, impartial of our mother or father firm. A few of our tales embrace affiliate hyperlinks. In case you purchase one thing by way of one in all these hyperlinks, we could earn an affiliate fee. All costs are appropriate on the time of publishing.

Leave a Reply

Your email address will not be published. Required fields are marked *