FTX Founder Sam Bankman Fried arrested in Bahamas after the U.S filed Criminal Charges

According to a press release the Royal Bahamas police force has arrested Sam Bankman Fried. He was taken into custody after the U.S prosecutors filed criminal charges against the founder. The southern district of New York responsible for investigating Sam and his sister firm Alameda confirmed the news of his arrest on Twitter. 

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

According to news published in the New York Times, the charges against the FTX founder could include wire fraud, securities fraud, money laundering, and conspiracy. Enforcement Director Gurbir Grewal said,

“We commend our law enforcement partners for working to secure the arrest of Mr. Sam Bankman-Fried in the Bahamas on federal criminal charges,” he said. “The Securities and Exchange Commission has separately authorized charges relating to Mr. Bankman-Fried’s violations of our securities laws, which will be filed publicly tomorrow in the Southern District of New York.”

Read in detail about the recent FTX Collapse!

Bahamas Prime Minister Philip Davis said that they will pursue an investigation on this matter, alongside the U.S.’s criminal charges. Sam was set to testify in the House Financial Services Committee on the FTX debacle and fraud. The committee Chair Maxine Waters said she was “surprised to hear” of the arrest in the U.S. Attorney’s office’s direction. In an individual news release, the Royal Bahamas police said that Sam was arrested at 6:00 p.m. local time. 

The U.S.A’s extradition treaty with the Bahamas allows prosecutors to release the defendant to the US if the charges applied are punishable for at least a year in both jurisdictions. In the last four weeks or more the suspected criminal Sam has pleaded not guilty without any proof. 

“I didn’t knowingly commit fraud,” he told the BBC over the weekend. “I didn’t want any of this to happen. I was certainly not nearly as competent as I thought I was, Bankman said in a statement. 

The chairwoman of the US House Financial Services Committee said that Sam Bankman Fried’s hearing won’t happen on Tuesday. The hearing has been moved and the first individual to testify in this case will be the new CEO of FTX, John J. Ray III who took over the exchange on November 11, 2022. So far the new CEO has not been able to clear any accusations laid on the former CEO and has also given a vary and vague picture of the exchange not having any guidelines or policies that protects the interests and safety of customers’ funds. 

“The scope of the investigation underway is enormous,” Ray said in a press statement. FTX’s collapse appears to stem from the concentration of power “in the hands of a very small group of grossly inexperienced and unsophisticated individuals” who failed to implement virtually any corporate controls, he added. 

Additional Read: FTX Collapse: Security Regulators of the Bahamas released order for the transfer of FTX Digital Assets

Sam Bankman Fried lives in denial 

The former CEO has been denying all accusations of mismanaging the funds of customers. He has denied his involvement in management of Alameda that betted against high-risk trading strategies such as arbitrage and “yield farming,” – investing in digital tokens that pay interest-rate-like rewards, according to ‘The Wall Street Journal’. However, Sam admitted that he did not pay attention to FTX and the risks involved, 

​​“Look, I screwed up,” he said at the New York Times’ DealBook Summit .“I was CEO of FTX, I had a responsibility.” 

Sam also acknowledged that he oversaw corporate controls and risk management required to run the company. 

However, Sam Bankman’s integrity is questionable. According to a report by Reuters, the former CEO built a backdoor to wire off huge amounts of money to different places. 

Additional Read: FTX Collapse helped investors in understanding the value of Decentralized Exchanges (DEXs)

Source: CoinDesk, CNN Business