SBF Arrested in Bahamas

December 12, 2022 Blockchain, Crypto, Digital Assets, Tokens, CBDCs, Metaverse, NFTs, Cyber Security, Hacks, Fraud Alerts, Risks, FinTech and Alternative Finance, Fintech International, Legal Issues, Regulation, Consultation, Stories No comments

CNBC | MacKenzie Sigalos and Rohan Goswami | Dec 12, 2022

FTX founder Sam Bankman-Fried was arrested by Bahamian authorities Monday evening after the United States Attorney for the Southern District of New York shared a sealed indictment with the Bahamian government, setting the stage for extradition and U.S. trial for the onetime crypto billionaire at the heart of the crypto exchange’s collapse.

Before his arrest was announced, Bankman-Fried had been expected to testify virtually before the House Financial Services Committee on Tuesday. His arrest is the first concrete move by regulators to hold individuals accountable for the multi-billion dollar implosion of FTX last month.
Damian Williams, the U.S. Attorney for the Southern District of New York, said on Twitter that the federal government anticipated moving to “unseal the indictment in the morning.”

See: Audio Interviews (post-bankruptcy) with Sam Bankman-Fried on FTX Collapse

In a statement, Bahamian Prime Minister Philip Davis said:

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.

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CBC News | Associated Press | Dec 13, 2022

U.S. Regulator: "FTX founder used investors' money as 'his personal piggy bank"

Sam Bankman-Fried also hit with 8-count indictment by U.S. prosecutors ranging from wire fraud to money laundering to conspiracy to commit fraud on the United States.
- The indictment says Bankman-Fried allegedly committed a years-long fraud by diverting investors' funds to his private hedge fund and using the money to make venture investments, lavish real estate purchases and large political donations.
- He was also charged with making more than $25,000 in illegal campaign contributions, a notable charge as Bankman-Fried was one of the largest political donors this year.

See: Digital Asset Classification vs Wire Fraud: What’s the Most Powerful Law in Crypto Right Now

The maximum potential prison exposure from these charges is 115 years, according to Nicholas Biase, a prosecutors' spokesperson.
Bankman-Fried's arrest came just a day before he was due to testify in front of the House financial services committee. Representative Maxine Waters, a California Democrat and chair of the committee, said she was "disappointed" that the American public, and FTX's customers, would not get to see Bankman-Fried testify under oath. That hearing, however, will be held Tuesday.

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