Sam Bankman- Fried, the founder and former CEO of FTX, was arrested by the Attorney General of the Bahamas.
According to a notice, the arrest came after the US government informed the Bahamas of criminal charges filed against Bankman-Fried and said it's likely to request his extradited from the nation where he was residing. Damian Williams, the US Attorney for the Southern District of New York, said in a statement that they expected to unseal the indictment in the morning.
After a run on FTX revealed it lacked the funds to pay back customers, the exchange quickly shut down operations.
Bankman- Fried was scheduled to testify in congressional hearings this week and has been on a seemingly non-stop media tour of interviews trying to explain what happened inside a business that, for a time, made him one of the world's youngest billionaires.
John J. Ray III, who has taken over for Bankman- Fried as CEO of FTX, has already said that he has never seen such a complete failure of corporate controls.
Ahead of Ray's appearance before the House Financial Services Committee, he laid out five points that gave us a hint about charges Bankman-Fried could potentially face.
While many things are unknown at this stage, and many questions remain, we know the following:
First, customer assets from FTX.com were commingled with assets from the Alameda trading platform.
Second, Alameda used client funds to engage in margin trading which exposed customer funds to massive losses.
Third, the FTX Group went on a spending binge in late 2021 through 2022, during which approximately $5 billion was spent buying a myriad of businesses and investments, many of which may be worth only a fraction of what was paid for them.
Fourth, loans and other payments were made to insiders in excess of $1 billion.
Fifth, Alameda’s business model as a market maker required deploying funds to various third party exchanges which were inherently unsafe, and further exacerbated by the limited protections offered in certain foreign jurisdictions.
"I am surprised to hear that Sam Bankman-Fried was arrested in the Bahamas at the direction of the United States Attorney for the Southern District of New York." The process to bring Mr. Bankman- Fried to justice needs to begin.
The Committee looks forward to beginning our investigation by hearing from Mr. John Ray III tomorrow, even though we will not be able to hear from Mr. Bankman- Fried tomorrow.
SBF conducted at least two live interviews on Monday, one with Forbes reporters and another with "Unusual Whales." The New York Post reported that he said he didn't think he would be arrested while playing the game.
His last post was at 4:44 pm.
In the early hours of December 13th, a statement was added from the US representative.
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