Sam Bankman-Fried arrested in The Bahamas
In November, FTX declared bankruptcy. The same day, the company’s CEO, Samuel Bankman-Fried, resigned as CEO. FTX had been one of the world’s largest cryptocurrency exchanges. Now, the company is under investigation.
According to federal prosecutors, around the same time the company filed for bankruptcy, FTX allegedly transferred hundreds of millions of dollars from the U.S. to the Bahamas.
Now, Bankman-Fried has been arrested. Authorities in the Bahamas took the 30-year-old into custody Monday night in response to criminal charges filed by U.S. prosecutors.
Damian Williams, the U.S. Attorney for the Southern District of New York, tweeted, “Earlier this evening, Bahamian authorities arrested Samuel Bankman-Fried at the request of the U.S. Government, based on a sealed indictment filed by the SDNY. We expect to move to unseal the indictment in the morning and will have more to say at that time.”
Bankman-Fried was scheduled to testify before the House Financial Services Committee in Washington, D.C., just one day after his arrest. Previously, he had said that he planned to testify remotely.
1) I still do not have access to much of my data — professional or personal. So there is a limit to what I will be able to say, and I won’t be as helpful as I’d like.But as the committee still thinks it would be useful, I am willing to testify on the 13th. https://t.co/KR34BsNaG1
— SBF (@SBF_FTX) December 9, 2022
Now, The Bahamian government plans to help with Bankman-Fried’s extradition to the US.
Bahamian Prime Minister Philip Davis released a statement about the arrest explaining, “The Bahamas and the United States have a shared interest in holding accountable all individuals associated with FTX who may have betrayed the public trust and broken the law. While the United States is pursuing criminal charges against SBF individually, The Bahamas will continue its own regulatory and criminal investigations into the collapse of FTX, with the continued cooperation of its law enforcement and regulatory partners in the United States and elsewhere.”
John J. Ray III replaced Bankman-Fried as CEO when he resigned. He is also scheduled to testify before House Financial Services Committee on Tuesday. In prepared remarks released by the committee, Ray explained that he believes FTX collapsed due to a “very small group of grossly inexperienced and unsophisticated individuals.” He added that the people who were running the company “failed to implement virtually any of the systems or controls that are necessary for a company that is entrusted with other people’s money or assets.”
According to legal experts who spoke to CNBC, it’s possible that Bankman-Fried could be sentenced to life in prison if the government prosecutes him for wire or bank fraud charges.