World

FTX founder Sam Bankman-Fried arrested in the Bahamas


CEO Sam Bankman-Fried

Bloomberg | Bloomberg | beautiful pictures

FTX founder Sam Bankman-Fried was arrested by Bahamian authorities this evening after the United States Attorney for the Southern District of New York shared a sealed indictment with the Bahamian government, setting the stage for conduction. degree and trial in the United States against a one-time crypto billionaire. about the collapse of the cryptocurrency exchange.

Bankman-Fried is expected to testify before the House Financial Services Committee on Tuesday. His arrest is the first concrete move by regulators to hold individuals accountable for last month’s multibillion-dollar FTX explosion.

related investment news

Cramer: Apple, Amazon, Microsoft and Google will drive the next rally - but not in the usual way

Investment Club CNBC

Damian Williams, United States Attorney for the Southern District of New York, say on Twitter that the federal government is expected to move to “open indictments in the morning.”

Bahamas Attorney General Ryan Pinder said that the US was “likely to request his extradition.”

In a statement, Bahamian Prime Minister Philip Davis said: “Bahamas and the United States have a common interest in holding accountable all individuals associated with FTX who may have betrayed the public trust. and breaking the law.”

“While the United States is pursuing criminal charges against the SBF individually, the Bahamas will continue its own criminal and legal investigations into the collapse of FTX, with the continued cooperation of the law and regulation enforcement partners in the United States and elsewhere,” continued the report.

Bahamian regulators and FTX attorneys were engaged in a bitter battle in the chambers and before the court of public opinion. The previous Monday, FTX lawyer charged The Bahamian government allegedly worked with Bankman-Fried to remove FTX assets from the company’s control and put it into a crypto wallet controlled by Bahamian regulators.

Bankman-Fried’s arrest by Bahamas law enforcement, as well as his expected extradition, suggests that close cooperation between the Bahamas and the United States will continue to grow throughout the proceedings. bankrupt. The Bahamas and the United States have had an extradition treaty since the early 20th century, when the Bahamas was still under British control. The current treaty was signed in 1990 and requires the requesting party to provide an arrest warrant issued by a judge or “other competent authority”.

In November, FTX and its affiliates filed for bankruptcy and Bankman-Fried stepped down as CEO. Cryptocurrency trading company has exploded spectacularly after a run on property similar to running a bank.

The crash of FTX ended when report from CoinDesk revealed a highly concentrated position in self-issued FTT coins, which Bankman-Fried hedge fund Alameda Research has used as collateral for billions of dollars in crypto loans. Binance, a rival exchange, announced it would sell its stake in FTT, prompting a massive withdrawal. The company froze assets and declared bankruptcy a few days later. Subsequent reports claimed that FTX mixed customer funds with Bankman-Fried crypto hedge fund Alameda Research, and billions of customer deposits were lost in the process.

Bankman-Fried was replaced by John J. Ray III, who oversaw Enron’s bankruptcy. Ray is also expected to testify before Congress this week. In the prepared comment second releaseRay said that FTX was “spent profligate” from late 2021 to 2022, when around “$5 billion was spent buying countless businesses and investments, many of which may be worth only a fraction of the cost.” small compared to what was paid for them,” and that the company made more than $1 billion in “loans and other payments… to insiders.”

Ray also confirmed media reports that FTX client funds were mixed with assets from Alameda Research. Ray said Alameda used client funds to make margin trades, causing them to suffer heavy losses.

Legal experts tell CNBC that if the federal government pursues bank fraud or wire transfer charges, Bankman-Fried could face life in prison without the possibility of supervised release. Such a severe punishment would be unusual but not extraordinary. Ponzi scheme mastermind Bernie Madoff has been sentenced to 150 years in prison, a life sentence in effect, for his massive ponzi scheme. The collapse of FTX caused the collapse of BlockFi Lending and sent the entire space into chaos.

Sam Bankman-Fried Faces Onslaught of Regulatory Investigators

news7d

News 7D: Update the world's latest breaking news online of the day, breaking news, politics, society today, international mainstream news .Updated news 24/7: Entertainment, Sports...at the World everyday world. Hot news, images, video clips that are updated quickly and reliably

Related Articles

Back to top button