Ex-FTX CEO arrested
2022.12.13 08:43
Ex-FTX CEO arrested
Budrigannews.com – On Monday, the day before he was scheduled to testify before Congress about the sudden failure of one of the largest cryptocurrency exchanges in the world last month, FTX founder Sam Bankman-Fried was arrested in the Bahamas at the behest of U.S. prosecutors.
The 30-year-old entrepreneur, who went by his initials SBF, rode a boom in bitcoin and other digital assets to become a billionaire multiple times over until FTX’s rapid demise. The arrest marks a stunning fall from grace for him.
The exchange, which was founded in 2019 and is based in the Bahamas, filed for bankruptcy on November 11 after it struggled to raise funds to prevent its demise in the face of traders’ hasty withdrawals of $6 billion from the platform in just 72 hours. Since then, it has come to light that Bankman-Fried secretly supported his trading business with $10 billion in customer funds.
Bankman-Fried was getting ready to lash out at his former lawyers at Sullivan and Cromwell, the new CEO of FTX, John Ray, and Binance, a rival exchange operator, at a Congressional hearing when he was arrested.
A draft of Bankman-Fried’s testimony was seen by Reuters. He planned to say that Sullivan and Cromwell lawyers pressured him to nominate Ray as CEO after the sudden departure of customer funds. Furthermore, when inside the space of minutes he adjusted his perspective, following a proposal of billions of dollars of crisp financing, he was informed it was past the point of no return.
Bankman-Broiled will presently not be able to affirm, as per Senator Maxine Waters, who said in a proclamation she was shocked to know about his capture. The testimony of Ray will proceed.
Bahamian police said Bankman-Fried will appear in a magistrate court on Tuesday. He was taken into custody at his apartment complex, the Albany, shortly after 6:00 p.m. (2300 GMT) Monday. He is anticipated to be extradited to the United States, according to the Bahamas attorney general’s office.
A representative for the U.S. Lawyer’s office in Manhattan affirmed Bankman-Seared had been captured in the Bahamas yet declined to remark on the charges.
According to U.S. prosecutors, Bankman-Fried was the subject of a sealed indictment, and the charges would be made public on Tuesday. He is accused of fraud and money laundering, according to the New York Times. The Securities and Exchange Commission of the United States said on Monday that separate authorization was given for charges related to Bankman-Fried’s violations of securities laws.
Sullivan and Cromwell, FTX, Ray, and Binance, as well as Bankman-Fried and his lawyer Mark Cohen, did not immediately respond to requests for comment.
Bankman-Fried has stated that he does not believe he is criminally liable. In an interview that Bankman-Fried gave on November 30 at the New York Times’ Dealbook Summit, he stated, “I never tried to commit fraud.”
The demise of FTX sent shockwaves through a shattered cryptocurrency industry that had already experienced a number of meltdowns this year, including Voyager Digital and Celsius Network.
The sector might face additional difficulties in the future. Monday, Reuters reported that some prosecutors at the Justice Department believe they have gathered sufficient evidence in their ongoing investigation of Binance to bring charges against the largest cryptocurrency exchange in the world and some of its top executives.
For the article, a spokesperson for Binance told Reuters: We are not privy to the workings of the United States Justice Department and it would not be appropriate for us to comment if we were.
Bitcoin remained constant at $17,150. This year, it is down more than 60%.
Legal experts said that Bankman-Fried’s numerous media interviews since the collapse of FTX have allowed prosecutors to point to inconsistencies to undermine his credibility with a jury. He has also apologized for his mistakes and explained what happened at the company.
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Renato Mariotti, a criminal defense attorney and former federal prosecutor, stated, “The defense is going to be completely boxed in by the prior statements SBF has made and the very incisive questions he has answered in the press and on social media.”
Bankman-Fried reiterated his apology in written testimony: I’d like to begin by formally and under oath stating: “I misbehaved,” he wrote.
Then, he sent off into a clarification of how things went seriously at FTX and his speculative stock investments Alameda Exploration, while condemning Sullivan and Cromwell and Beam as well as most despised rival Binance for their activities as his firm collapsed.
Bankman-Fried said that Sullivan and Cromwell and the general counsel of FTX’s U.S. unit, who he claimed was a former lawyer at the law firm, put pressure on him to resign as CEO of FTX and appoint Ray.
Bankman-Fried stated that he received “a potential funding offer for billions of dollars” less than ten minutes after signing a document to name Ray CEO of FTX at 4.30 a.m. on Nov. 10. According to Bankman-Fried, he instructed his legal team to revoke the appointment of the CEO a few minutes later, but they informed him that it was already too late.
Bankman-Fried stated that he had been disconnected from FTX’s systems since then and that Ray had not responded to his emails offering assistance or other details.
Bankman-Seared, who had turned into an unmistakable and eccentric figure known for his wild hair, shirts and shorts during crypto’s blast, said the fortunes of FTX and his exchanging firm Alameda declined quickly this year as digital currencies crashed in the midst of increasing loan fees.
He stated that Alameda had a net asset value of more than $50 billion and debt levels that were manageable at the end of 2021. With the decline of digital assets, that became unsustainable.
Bankman-Fried wrote, “Last year, my net worth was valued at $20 billion.” I believe my bank account had approximately $100k in it when I last looked.
