Sam Bankman-Fried, a former billionaire, previously recognised as a ‘crypto genius’ who quickly transformed into a crypto villain, was arrested by authorities in the Bahamas on Monday night due to criminal allegations brought by US prosecutors.
As mentioned by the Statement from the Attorney General of The Bahamas, Sen. Ryan Pinder KC, on the arrest of Sam Bankman-Fried, Sam Bankman-Fried (“SBF”), the former CEO and Founder of FTX crypto exchange, has been detained by The Royal Bahamas Police Force, according to a statement from the Office of Attorney General of The Bahamas on December 12, 2022. The arrest came after a formal notification from the United States that the US has filed criminal charges against SBF and that will probably ask for his extradition.
The Justice Department has been looking into SBF activities ever since FTX, one of the biggest cryptocurrency exchanges in the world, collapsed and filed for bankruptcy protection on November 11.
Federal Prosecutors were closely examining how FTX handled customer funds and the accusations that FTX transferred hundreds of millions of dollars from the US to the Bahamas around the time of the bankruptcy filing. Prosecutors are also reportedly investigating if Bankman-Fried orchestrated trades that caused the collapse of the TerraUSD cryptocurrency earlier this year to manipulate the cryptocurrency markets.
Separate from the indictment, the Securities and Exchange Commission, which had also opened an investigation, announced Monday that the regulator had approved charges concerning Bankman-alleged Fried’s violation of securities laws.
Due to the sealed indictment, the charges were not immediately obvious. Regulators and the Justice Department are looking into whether FTX used client money to support dangerous bets at Bankman-hedge Fried’s fund, Alameda Research, according to prior reports from the Associated Press.
Sources heard by The New York Times, with the case and legal knowledge, mentioned that the possible indictments could include money laundering, securities fraud, security fraud conspiracy, wire fraud, and wire fraud conspiracy.
The US Attorney for the Southern District of New York, Damian Williams, confirmed that Sam Bankman-Fried was arrested and mentioned that the indictment will be released on Tuesday, December 13, 2022.
As mentioned by the Tweet from the US Attorney SDNY official page, confirming SBF arrest, Sam Bankman-Fried was arrested earlier this evening in the Bahamas at the request of the American government, based on a sealed indictment brought by the SDNY. The indictment is scheduled to be unsealed on Tuesday morning, at which point authorities will have more to say.
The arrest of SBF came one day before when US senators would be questioning Bankman-Fried on Capitol Hill in Washington, DC, regarding FTX’s tragic collapse.
Bankman-Fried claimed he would be giving testimony to the House Financial Services Committee via video conference because he was “very overbooked” and worried about his safety going to Washington, DC, hours before being arrested.
In the Statement made by the Attorney General of The Bahamas, Sen. Ryan Pinder KC, he also mentioned that as a result of the notification received and the material presented therewith, it was judged appropriate for the Attorney General to seek SBF’s arrest and hold him in custody under Bahamas nation’s Extradition Act.
Ryan Pinder also mentioned that The Bahamas plans to process any formal extradition request as soon as it is made, in accordance with Bahamian law and its commitments under its treaty obligations to the United States.
In his closing remarks, Prime Minister Davis said that holding responsible any FTX associates who may have betrayed public confidence or violated the law is in the interest of both the Bahamas and the United States. The Bahamas will continue its own regulatory and criminal investigations into the demise of FTX, with the continued assistance of its law enforcement and regulatory allies in the US and internationally, while the US is pursuing criminal charges against SBF on an individual basis.
The time for Sam Bankman-Fried to pay for his crimes may have come. As US legal experts said to CNBC, SBF could be sentenced to life in prison without the possibility of supervised release if the federal government presses accusations of wire fraud or bank fraud. It would be rare but not extraordinary to impose such a harsh penalty. For his huge ponzi scam, Ponzi scheme mastermind Bernie Madoff received a 150-year sentence, effectively a life sentence.
(By Jordano M. Z. )
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