Fallen Cryptocurrency Star and Ex-FTX Boss Sam Bankman-Fried Arrested in The Bahamas

Fallen Cryptocurrency Star and Ex-FTX Boss Sam Bankman-Fried Arrested in The Bahamas

Sam Bankman-Fried, the fallen cryptocurrency star and former head of the FTX platform, was arrested in the Bahamas on Monday at the request of US authorities, New York prosecutor Damian Williams announced.

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“We will have more information to share about the indictment” Tuesday morning, he said in a tweet, without elaborating on the nature of the charges.

“SBF” had been making media appearances for a month, despite the risk of a fraud lawsuit after the spectacular implosion of the company, valued at 32,000 million dollars at the beginning of the year.

The United States has “filed a complaint” against the 30-year-old, who resides in the Bahamas, and “will likely request his extradition,” Bahamas Attorney General Ryan Pinder said in a press release posted on Twitter. .

“SBF” will appear in court in the capital, Nassau, on Tuesday.

Both countries “have an interest in holding accountable individuals associated with FTX who may have betrayed public trust and violated the law,” said Philip Davis, prime minister of Cuba’s north-eastern archipelago.

The Bahamas will conduct its own “criminal investigation into the collapse of FTX,” he added, quoted in the statement.

In the United States, “if convicted of fraud, you could spend the rest of your life in prison, given the amount,” said Jacob Frenkel of Dickinson Wright.

“There would be no prosecution if the prosecutors were not absolutely convinced that they will get a conviction,” added this specialist in federal investigations, who worked for the US Securities Police (SEC).

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“Not very well informed”

Sam Bankman-Fried was supposed to speak before a House committee on Tuesday, as was John Ray, the new head of FTX.

Former executives at the bankrupt platform showed a “total failure” at all levels of control, spending without actually counting their clients’ money, John Ray said Monday, in a document released on the eve of the congressional hearing.

At first glance, “the collapse of the FTX group appears to be the result of the absolute concentration of control in the hands of a very small group of inexperienced and unsophisticated individuals, who have not implemented any of the systems or controls necessary for a business to that he is entrusted with other people’s money or property,” the official said.

Considered one of the world’s leading cryptocurrency exchanges, FTX was suddenly unable to return money their clients had deposited there in early November.

The group announced its bankruptcy filing on November 11.

“I have never tried to defraud anyone,” Sam Bankman-Fried said at the end of November during a conference organized by the New York Times. “Clearly I made a lot of mistakes and I would give anything to be able to do some things again.”

The ex-muse of cryptocurrencies has chosen to multiply the interviews and speeches on Twitter, despite the seriousness of the accusations against her.

A graduate of the Massachusetts Institute of Technology, the son of Stanford University law professors, he had managed to legitimize cryptocurrencies with the general public and the political class.

But his contrite air and hesitant tone during his recent speeches stand in stark contrast to the reassuring image he has built for himself in recent years.

“Spending spree”

“It was a very risky strategy,” says Jacob Frenkel. In the end, it is “as if he had admitted that he behaved criminally.”

Investigation has already shown that assets deposited by clients at FTX were mixed with those of cryptocurrency investment and brokerage firm Alameda, also founded by Sam Bankman-Fried. And Alameda gleefully dove into FTX client funds to make risky bets.

Such use of these funds would constitute fraud if it violated the terms of the agreement between FTX and its clients, many lawyers believe.

FTX has also embarked on a “spending spree” beginning in late 2021, with $5 billion in ventures and investments “may only be worth a fraction” of that, according to John Ray.

The platform has also disbursed, in loans or payments, more than a billion dollars destined for people inside the company.

For the new leader, who has supervised several bankruptcy processes, including that of the former US energy giant Enron, the objective now is to “maximize the value” of the assets that FTX still owns to reimburse clients and creditors as much as possible. the group.

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