Cryptocurrency Billionaire Arrested… Scam, Conspiracy & Money Laundering

© via REUTERS – While all eyes were on Tuesday’s meeting with the House Financial Services Committee, FTX and Alameda Research’s Sam Bankman-Fried is expected to testify to unravel the mystery of how his stock market collapsed last month.

Sam Bankman Fried, the founder of failed cryptocurrency exchange FTX, has been arrested in the Bahamas after US prosecutors filed criminal charges against him, according to a statement from the Bahamian government.

The Southern District (TADAWUL:) of New York, which is investigating Bankman-Frieda and the collapse of FTX and its sister company Alameda, confirmed his arrest on Twitter.

More details

“Earlier this evening, Bahamian authorities arrested Samuel Bankman Fried at the request of the United States government, pursuant to a sealed indictment filed by the SDNY,” wrote US Attorney Damian Williams.

Damian Williams added: “We expect to start opening the indictment in the morning and will have more to say then.”

Bankman-Fried, who was arrested without incident at his apartment complex shortly after 6 p.m. EST Monday in Nassau, is scheduled to appear in court Tuesday, the Royal Bahamas Police Force said in a statement.

I do not know

“I still don’t have access to a lot of my information — professional or personal,” Bankman-Fried said last week in an interview with House Speaker Maxine Waters.

“So there’s a limit to what I’m going to say and I won’t be as useful as I want to be, but since the Committee still thinks it will be useful, I’m willing to testify on the thirteenth.”

separate fees

Shortly after the SDNY confirmed his arrest, the SEC said it had approved separate charges related to Bankman-Fried’s “securities law violations,” to be publicly filed Tuesday.

It’s unclear what charges await Bankman-Frieda, the 30-year-old crypto celebrity who became an overnight pariah last month.

His company suffered a liquidity crisis and filed for bankruptcy, leaving at least a million depositors without access to their funds.

Fraud, conspiracy and money laundering

The New York Times, citing a person familiar with the matter, reported that the charges against Bankman-Fried included wire fraud (TADAWUL: ), conspiracy to defraud, securities fraud, conspiracy to commit securities fraud and money laundering.

An extradition treaty between the United States and the Bahamas allows U.S. prosecutors to return defendants to U.S. soil if the charges would carry at least one year in prison in both jurisdictions.

In the four weeks since FTX filed for bankruptcy, Bankman-Fried has sought to portray himself as a somewhat hapless CEO who got out of the house, denying allegations that he defrauded FTX clients.

“I did not intentionally commit fraud,” he said. “I didn’t want any of this to happen. I definitely wasn’t nearly as qualified as I thought.”


Bankman-Fried was scheduled to appear on Tuesday before the US House Financial Services Committee, which is demanding answers about how the company failed, hopping around the digital asset ecosystem.

Many crypto companies have suspended operations, frozen user accounts and in some cases filed for bankruptcy due to exposure to FTX.

After his arrest, Rep. Maxine Waters, the committee’s chairwoman, said Bankman-Fried would not testify as planned on Tuesday.


However, the hearing continues, beginning with testimony from FTX’s new CEO, John J. Ray III, who took over at Bankman-Fried on Nov. 11 and is tasked with guiding it through the bankruptcy process.

“While I am disappointed that we will not be able to hear from Mr. Bankman Fried tomorrow, we remain committed to getting to the bottom of what happened,” Waters said in a statement.

So far, Ray has painted a picture of a cryptocurrency empire with virtually no institutional controls and a dire lack of financial record-keeping and more.”The scope of the ongoing investigation is vast,” Ray said in prepared remarks before his testimony.

Wray said that while the investigation is not complete, the collapse of FTX appears to stem (TADAWUL:) from the concentration of power “in the hands of a very small group of inexperienced and not very experienced individuals” who failed to implement almost any corporate controls.

Ray also states that “client assets from are mixed with assets from the Alameda trading platform.” This is a big problem for investigators, because FTX and Alameda are, on paper, two separate entities.

Billionaire exile.

Bankman-Fried has denied he intentionally commingled funds and has sought to distance himself from the day-to-day management of Alameda, which has developed a series of high-stakes trading strategies such as arbitrage and “returns.”

It is also known as investing in digital tokens that pay rewards similar to interest rates, according to a report by The Wall Street Journal. Admitting that they mismanaged FTX and did not pay enough attention to the risks.

“I screwed up as CEO of FTX … I had a responsibility,” he said at the New York Times’ DealBook Summit late last month.

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