FTX exchange founder Sam Bankman-Fried was arrested by Bahamian authorities after the U.S. Department of Justice (DOJ) filed criminal charges against cryptocurrency’s disgraced juvenile king.
Damien Williams, U.S. Attorney for the Southern District of New York, the primary vehicle for prosecuting financial criminals, has announced the arrest of SBF. on Twitter, said Bahamian officials acted at the request of the U.S. government. Williams said the indictment will likely be opened Tuesday morning, after which he added, “I have more to say.”
The New York Times reported that SBF faces charges of wire fraud, wire fraud conspiracy, securities fraud, securities fraud conspiracy and money laundering. Bahamas Attorney General Ryan Pinder apparently said Monday night that the US “is likely to demand.” [SBF’s] The Bahamas will “promptly” process such requests.
The US Securities and Exchange Commission (SEC) is preparing its own indictment against SBF.Executive Director Gurbil Grewal murmured Further details regarding SBF’s “securities law violations” are expected to be filed on Tuesday.
Gurbir Grewal: We applaud our law enforcement partners for successfully arresting Sam Bankman-Fried on federal criminal charges. The SEC has approved another indictment related to his securities law violations, which will be filed publicly tomorrow at SDNY. https://t.co/ON0LgY4mf4
— U.S. Securities and Exchange Commission (@SECGov) December 13, 2022
Bahamian Prime Minister Philip Davis issued a statement saying that his country and the United States have a “common interest in holding accountable all individuals associated with FTX who may have betrayed public trust and broken the law. I have a Davis added that local authorities will continue to conduct their own “regulatory and criminal investigations into the collapse of FTX.”
very inexperienced and unsophisticated
The SBF was scheduled to testify remotely before the US House Financial Services Committee on Tuesday morning, but that now seems unlikely. The SBF had previously turned down requests to appear at a similar Senate hearing on Wednesday, but failed to make more friends in Washington, D.C.
Maxine Waters Statement on SBF. pic.twitter.com/ThUu8oGkcz
— Autism Capital 🧩 (@AutismCapital) December 13, 2022
FTX’s current CEO, John J. Ray III, was appointed after FTX filed for bankruptcy on November 11 and is expected to attend a hearing on Tuesday. Wray said the collapse of FTX, its affiliated market maker Alameda Research, and about 130 other affiliates was the result of the cabal being run by “a very small group of very inexperienced and unsophisticated individuals.” I testify that it was because it was done.
Because of its inexperience and lack of sophistication, Alameda co-CEOs Caroline Ellison and Sam Trabucco used FTX client funds to margin trade rashly, to no avail. To plug the resulting hole in Alameda’s balance sheet, SBF et al. I put it on paper with FTX’s worthless in-house FTT token.
When rumors of this financial imbalance leaked, FTX customers flooded the site with withdrawal requests.Binance exchange founder and early FTX investor his Changpeng ‘CZ’ Zhao has since publicly Threatened to throw away FTT worth 500 million He received it last year when FTX bought the stock. The fire at FTX quickly caught fire and the entire enchilada collapsed within days.
In Ray’s prepared remarks, he also said that FTX will “go wild in the second half of 2021 and into 2022, during which about $5 billion will be spent on the purchase of countless businesses and investments, many of which will be It may be worth only a fraction of what was paid for them. FTX insider also received over $1 billion in ‘loans and other payments’.
Circular firing squad takes aim
SBF attended a Twitter Spaces event earlier Monday. This is part of an ongoing press tour that defies legal norms (and common sense). Ironically, at the event, SBF claimed that they thought it unlikely they would be arrested.
Numerous members of “crypto Twitter” resorted to wild conspiracy theories to explain why the SBF was able to continue his unwise media blitz without someone slapping his cuffs. was The reality was much more mundane. Law enforcement often moves at a glacial pace because, unlike 280-letter Nostradamus, they need to make sure legal ducks are in line before they can act.
Although SBF never left the Bahamas, Caroline Ellison’s whereabouts remained a mystery until she was discovered in a New York City coffee shop last week. Bloomberg then reported that Ellison had hired Wilmer Hale’s partner, Stephanie Avakian, a former head of the SEC’s enforcement division, as her legal representative.
Caroline Ellison is about to flip Sam Bankman Fried https://t.co/yMZtQxIuai
— CoinGeek (@RealCoinGeek) December 6, 2022
Since then, speculation has run rampant that Ellison was prepared to testify against his former accomplices/incompetence in exchange for more lenient treatment. As such, Ellison is a motivated speaker, given that courts may deliver lengthy sentences to violators of the Rape-Influenced Corrupt Organizations of the United States (RICO) Act.
The individuals behind Binance’s CZ and Tether stablecoins may have similar fears. FTX/Alameda was one of his biggest beneficiaries of Tether (around $40 billion), but the collapse of SBF’s empire has forced him to buy such a huge amount of his Tether tokens. A real question arose as to whether they had enough cash to
Tether likes to claim that it only sells Tether in US dollars and invests those dollars in trustworthy instruments such as US Treasury bonds (although no one on Wall Street has heard of Tether). But the latest testimony about Tether’s reserves (despite its five-year commitment, Tether has never submitted to a formal third-party audit) points to billions of dollars in “secured loans.” increase.
If anyone knows the truth about Tether, it’s SBF. The federal government has taken particular interest in recent news that Alameda and the chairman of Deltek Bank and Trust, the Bahamian banker of both FTX and Tether, had their finger on a small, unremarkable bank in Washington state. There may be
Bottom line: If SBF is being sold by Ellison, SBF will have to offer someone else’s head to the federal government to get leniency for itself. In addition to Tether, there have been recent revelations that SBF, CZ, and other exchange bosses have joined a group chat on the Signal private messenger app called “Exchange Coordination.” Authorities may want to know what other RICO-worthy conspiracies may have been hatched during these online chats.
This may seem crazy, but the Australian Financial Review reported on Monday that SBF, Ellison and several other FTX/Alameda alumni joined another Signal group chat called “The Wire Fraud”. I reported. SBF told AFR he had “never heard of such a group” and “if this is true, I was not a member of that inner circle”.
The wheel of justice may turn slowly, but once it starts rolling, you don’t want to get caught in it. CoinGeek has long warned that a new era of regulation is coming, that the free-spirited “Crypto Brothers” are constantly snorting and playing with fire at authorities, and that they really weren’t in the mood to “forgive and forget” I’ve been Still, I can’t wait for someone to leak his message on the “jail sucks” chat.
BitMEX to Binance, Bitcoin.com, Blockstream, ShapeShift, Coinbase, Ripple,
Ethereum, FTX, Tether – embraced the digital asset revolution and turned the industry into a minefield for naive (and experienced) players in the market.
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