Sam Bankman-Fried, the founder of FTX, was detained by Bahamian authorities on Monday night after the Southern District of New York’s US Attorney shared a sealed indictment with them, paving the way for his extradition and eventual trial in the US. The indictment which made several rounds on Twitter revealed he was the driving force behind the collapse of the crypto exchange.
that's curtains for SBF. FTX CEO John Ray testifies before him tomorrow. Sam will be utterly hamstrung by this. https://t.co/Uu1RDo2DfZ pic.twitter.com/Z3B7Hngfqw
— nic 🌠carter (@nic__carter) December 12, 2022
His arrest marks the authorities’ first significant step toward holding those accountable for the multibillion-dollar collapse of FTX last month.
SBF won’t appear for testimony
Bankman-Fried was scheduled to appear before the House Financial Services Committee on Tuesday before his arrest was made public, but his attorneys have passed out information that he will not be there. His arrest “surprised” Rep. Maxine Waters, D-Calif., who chairs that committee, who expressed disappointment that Congress wouldn’t be able to hear from him on Tuesday.
The federal government planned to “unseal the indictment in the morning,” according to U.S. Attorney Damian Williams for the Southern District of New York. As reported by the New York Times, which relied on a source with knowledge of the situation, the allegations include money laundering, securities fraud, wire fraud, and conspiracy to commit wire fraud.
Watchdogs now springing paws on Sam Bankman and FTX
Securities and Exchange Commission enforcement director Gurbir Grewal announced in a statement that the SEC has begun a second set of charges against Bankman-Fried for “violations of our securities laws, which will be filed to the public tomorrow in the Southern District of New York.”
According to Ryan Pinder, the Bahamas’ attorney general, the United States “is expected to request his extradition.” His arrest was verified by the Royal Bahamas police, who added that he will show up in magistrate court in Nassau on Tuesday.
Ray, FTX’s CEO, also corroborated media claims that FTX customer monies had been mixed with Alameda Research assets. According to Ray, Alameda engaged in margin trading using customer money, placing them at risk of significant losses.
The Bahamas and the United States have a common interest in holding responsible those people connected to FTX who may have breached the public trust and broken the law, according to a statement from Bahamian Prime Minister Philip Davis.
Before his arrest, Sam had made several interviews with various news outlets despite many criticizing his action. All these moves by SBF seemed a desperate move by the former FTX CEO to clear up his name and gain back the trust of the people. However, SBF could be looking to serve a huge punishment after FTX’s current CEO’s remarks revealed the fraud behind the collapse.
