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Breaking: Sam Bankman-Fried Arrested in the Bahamas
It may have taken longer than people thought it would but it appears the long arm of the law has come down hard on former FTX CEO Sam Bankman-Fried.
Bankman-Fried, or SBF as he’s known in the crypto community, was arrested last night in the Bahamas. The charges were issued from the Southern District of New York, not the local police.
SBF faces a plethora of civil and criminal charges including wire fraud, conspiring to defraud the United States, violating campaign finance laws and more. Prosecutors allege that Bankman-Fried was lying to investors from the start of mega-exchange FTX.
Meanwhile the SEC also filed civil fraud charges against Bankman-Fried and allege that he misled investors and lied about the health of the FTX business and connection to trading firm Alameda Research.
The charges come roughly one month after the shocking revelation that FTX was insolvent.
SBF Awaits Move to United States
For the time being Sam Bankman-Fried remains in the Bahamas, where FTX was headquarter, but it appears it’s only a matter of time before he is extradited to the USA.
Over the past two weeks SBF participated in a series of interviews with various outlets where he attempted to shed light on exactly what went wrong at FTX. Critics suggested he was trying to sway public opinion and escape punishment for US authorities. It appears it was all for nought as he faces a staggering number of charges.
It’s still unclear what impact the implosion of FTX and SBF will have on crypto at large but it seems likely that more regulation will be coming to the industry.
Sam Bankman-Fried built FTX into one of the biggest crypto exchanges in the world and was alleged to be worth nearly $24 billion at the peak of the crypto bull run. That fortune is now dust and the Bloomberg Billionaires Index recently considered Bankman-Fried to have no material wealth.
The details of FTX’s collapse are still opaque but it appears the exchange was transferring customer funds to sister trading firm Alameda Research, which in turn was heavily invested in FTX’s FTT token. When the market started to go sour, it created a death spiral that nuked the value of all FTX-related assets.
The current chief executive of FTX John J. Ray III, in charge of restructuring the company, says the FTX appears to be a case of “old-fashioned embezzlement.”
We’ll have more on this story as it develops.
