- Sam Bankman-Fried was arrested yesterday on multiple charges
- The charges come from the Southern District of New York and are all financial in nature
- What do we know of his arrest and what happens next?
FTX co-founder and disgraced former CEO Sam Bankman-Fried was arrested yesterday by Bahamas police at the request of U.S. officials, just hours before he was due to testify before a U.S. House finance committee. Here’s five things we know of the situation at this point.
USA Damian Williams: 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.
— US Attorney SDNY (@SDNYnews) December 12, 2022
The New York Times reported that Bankman-Fried has been arrested on multiple charges including wire fraud, wire fraud conspiracy, securities fraud, securities fraud conspiracy and money laundering. Given the litany of charges against him it is highly likely that Bankman-Fried will agree a deal to have some dropped in return for a guilty plea down the line.
Bankman Fried was arrested by Bahamas police after the U.S. charges were unsealed. Extradition will now be applied for, where the disgraced former CEO will appear before the United States District Court for the Southern District of New York, assuming his safe arrival in the country. The New York Times reported that extradition could take weeks or longer if Bankman-Fried decides to contest the extradition.
Bankman-Fried Will Not Testify to House
Bankman-Fried’s arrest is a case of ‘out of the frying pan and into the fire’ – he was due, reluctantly, to face the U.S. House of Representatives Financial Services Committee to answer questions on FTX’s collapse. This, of course, will not be going ahead, much to the displeasure of some congresspeople, who asked for his arrest to be delayed so they could speak to him first.
FTX’s new CEO, John Ray III, who Bankman-Fried now says he was pressured to appoint, is still scheduled to appear, where he is expected to eviscerate FTX and its operations.
No One Else Arrested
Bankman-Fried was the only person charged and arrested yesterday. This is good news so far for others in the FTX inner circle, most notably co-founder Gary Wang and Alameda Research CEO Caroline Ellison, as this means they have escaped initial scrutiny. However, we don’t know what Bankman-Fried will say to police in order to reduce his sentence, which could mean a nervous few weeks for the pair, and potentially others.
FTT Token Drops
News of the arrest had an impact on the FTT token, which somehow still has a presence, presumably on the vain hope that FTX gets resurrected after bankruptcy. FTT dropped from $1.57 to $1.33, with $13.4 million worth of trading taking place in the past 24 hours. Mad.