Sam Bankman-Fried, the founder and former CEO of cryptocurrency exchange FTX, was arrested in the Bahamas Monday and will be indicted in a U.S. court on Tuesday morning.
Summary
Sam Bankman-Fried, the founder and former CEO of cryptocurrency exchange FTX, was arrested in the Bahamas Monday and will be indicted in a U.S. court on Tuesday morning.
- Bahamian police arrested Bankman-Fried for so-called “Financial Offences” against U.S. and Bahamas law. Bankman-Fried is set to remain in Bahamian custody until transfer to U.S. authorities for extradition.
- Bahamian authorities arrested Bankman-Fried at the request of the U.S. just a day before he was to testify in front of the House Financial Services Committee.
- Bankman-Fried’s arrest came at the behest of Damian Williams, the U.S. Attorney for the Southern District of New York. The exact list of charges will be unsealed on Tuesday morning.
- Bankman-Fried skyrocketed to prominence amid a boom in cryptocurrency before the equally rapid decline of his exchange, which filed for bankruptcy on Nov. 11.
- “Never in my career have I seen such an utter failure of corporate controls at every level of an organization, from the lack of financial statements to a complete failure of any internal controls or governance whatsoever,” said FTX CEO John J. Ray. Ray, a corporate bankruptcy veteran who worked in Enron after its collapse, was brought in to lead FTX through bankruptcy proceedings.
- NBC News picked up a statement from Philip Davis, the Prime Minister of the Bahamas. “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,” said the Prime Minister after Bankman-Fried’s arrest.
- The New York Times profiled Joseph Bankman and Barbara Fried, the Stanford Law professors who were “more than just supportive parents backing their child’s business.” Both professors had tangled relationships with their son Sam’s company and they may be bankrupted by FTX’s collapse.
- As CNN reported, the Securities and Exchange Commission announced it would authorize separate charges against Bankman-Fried for violating securities laws and would unveil those publicly on Tuesday.
- The Wall Street Journal reported Bankman-Fried’s parents remained with him at the firm’s Bahamas headquarters amid the company’s collapse. His parents are reportedly giving the 30-year-old ex-billionaire legal advice while on an effective hiatus from teaching.
- As Fox News reported, “FTX filed for bankruptcy on Nov. 11 when the firm ran out of money after the cryptocurrency equivalent of a bank run. Customers tried to withdraw their assets all at once because of growing doubts about the financial strength of the company and its affiliated trading arm, Alameda Research.” It’s unclear whether customers will ever be able to recover their lost funds.
- Per The Washington Examiner, Bankman-Fried is expected to be charged with “wire fraud, wire fraud conspiracy, securities fraud, securities fraud conspiracy and money laundering.”
Return to Freespoke 
© Dominic Moore, 2022
