FTX’s Sam Bankman-Fried Is Arrested in the
Bahamas
A statement by the government of the Bahamas said Mr.
Bankman-Fried was arrested after prosecutors in the United States filed
criminal charges.
David
Yaffe-Bellany William K. Rashbaum Matthew Goldstein
By David
Yaffe-Bellany, William K. Rashbaum and Matthew Goldstein
Dec. 12,
2022
https://www.nytimes.com/2022/12/12/business/ftx-sam-bankman-fried-bahamas.html
Sam Bankman-Fried,
the disgraced founder of the collapsed cryptocurrency exchange FTX, was
arrested in the Bahamas on Monday after U.S. prosecutors filed criminal
charges.
“S.B.F.’s
arrest followed receipt of formal notification from the United States that it has
filed criminal charges against S.B.F. and is likely to request his
extradition,” the government of the Bahamas said in a statement.
The arrest
was the latest stunning development in one of the most dramatic falls from
grace in recent corporate history. Mr. Bankman-Fried, 30, was scheduled to
testify in Congress on Tuesday about the collapse of FTX, which was one of the
most powerful firms in the emerging crypto industry until it imploded virtually
overnight last month after a run on deposits exposed an $8 billion hole in its
accounts.
Prosecutors
for the Southern District of New York confirmed that Mr. Bankman-Fried had been
charged and said an indictment would be unsealed on Tuesday. Separately, the
Securities and Exchange Commission said in a statement that it had authorized
charges “relating to Mr. Bankman-Fried’s violations of our securities laws.”
The
criminal charges against Mr. Bankman-Fried included wire fraud, wire fraud
conspiracy, securities fraud, securities fraud conspiracy and money laundering,
said a person with knowledge of the matter.
Mr.
Bankman-Fried, who was the only person charged in the indictment, was taken
into custody by the Bahamian authorities, the person said. He was arrested
shortly after 6 p.m. at his apartment complex in the Albany resort in the
Bahamas, according to a statement from the Bahamian police. The timing of when
Mr. Bankman-Fried might be moved to the United States was unclear. While the
Bahamas has an extradition treaty with the United States, the process can take
weeks, and sometimes far longer if a criminal defendant contests it.
Mr.
Bankman-Fried was cooperative during the arrest, according to a person familiar
with the matter, and will be held overnight in a cell at a police station. He
is scheduled to appear on Tuesday in Magistrate Court in Nassau, the capital of
the Bahamas.
A spokesman
for Mr. Bankman-Fried declined to comment. Nicholas Biase, a spokesman for the
U.S. attorney’s office, also declined to comment.
“Earlier
this evening, Bahamian authorities arrested Samuel Bankman-Fried at the request
of the U.S. government, based on a sealed indictment,” Damian Williams, the
U.S. attorney for the Southern District of New York, said in a statement. “We
expect to move to unseal the indictment in the morning and will have more to
say at that time.”
Once a
golden boy of the crypto industry and a major donor to the Democratic Party,
Mr. Bankman-Fried has seen his vast business and political empire collapse with
stunning speed. His exchange filed for bankruptcy last month, and his personal
fortune has dwindled to virtually nothing. While he used to be hailed as a
modern-day John Pierpont Morgan, he’s now more often likened to Bernie Madoff,
who orchestrated the largest Ponzi scheme in history.
Lawyers
involved in the case expressed surprise at the suddenness of the arrest. Mr.
Bankman-Fried had been widely expected to face a criminal indictment. But
complex white-collar fraud cases can take months to build. Until the arrest,
Mr. Bankman-Fried was slated to testify remotely about the FTX collapse in a
hearing in front of the House Financial Services Committee on Tuesday. The hearing
is still set to go ahead, just without Mr. Bankman-Fried’s testimony.
“The
American public deserves to hear directly from Mr. Bankman-Fried about the
actions that’ve harmed over one million people,” Representative Maxine Waters,
who chairs the committee, said in a statement. “The public has been waiting
eagerly to get these answers under oath before Congress, and the timing of this
arrest denies the public this opportunity.”
Several
people familiar with the investigation said the speed with which the authorities
moved in filing criminal and civil charges was an indication that prosecutors
and regulators had received information from cooperating witnesses.
Mr.
Bankman-Fried has been facing scrutiny from dozens of regulators across the
world, including the Justice Department, the S.E.C. and the Commodity Futures
Trading Commission. Prosecutors in Manhattan have been examining whether FTX
broke the law by transferring billions in customer funds to Alameda Research, a
crypto hedge fund that Mr. Bankman-Fried also founded and owned.
They have
also focused on whether Mr. Bankman-Fried and his hedge fund engaged in market
manipulation that may have helped cause the failure of two prominent
cryptocurrencies last spring.
Ever since
FTX collapsed, the S.E.C. and federal prosecutors have moved quickly with
requests for documents from various parties, including some of the big
financial firms that invested up to $2 billion in the crypto exchange beginning
last year, said two people briefed on the matter.
It is
unclear whether the federal authorities are looking at charging anyone else in
connection with the collapse of FTX. It is not uncommon for an S.E.C. civil
complaint to reveal more information about the events that led to the filing of
charges than an indictment.
FTX’s
collapse began early last month, when a run on deposits revealed an $8 billion
hole in the company’s finances. Mr. Bankman-Fried sought a lifeline from a
rival company, the giant crypto exchange Binance, but the deal fell through
after Binance examined FTX’s books.
Mr.
Bankman-Fried quickly became a villain in the crypto industry. Hundreds of
thousands of customers have funds trapped on FTX, with little prospect of
getting them back anytime soon.
Surprisingly
for an executive facing criminal investigations, Mr. Bankman-Fried had given
numerous media interviews in the wake of FTX’s collapse. At the recent DealBook
Summit, a New York Times event, he blamed “huge management failures” and sloppy
accounting for his company’s implosion, insisting that he “did not ever try to
commit fraud” or knowingly dip into the funds of FTX customers to finance other
investments.
When FTX
filed for bankruptcy, Mr. Bankman-Fried stepped down as chief executive. He was
replaced by John Ray, a seasoned corporate turnaround expert who oversaw the
unwinding of the energy trading company Enron after an accounting scandal in
2001.
In a
bankruptcy filing last month, Mr. Ray said that the management of FTX reflected
a “complete failure of corporate control.”
Mr. Ray was
also scheduled to testify to the House on Tuesday. In a prepared statement, he
said FTX had been a mess.
The
collapse stemmed “from the absolute concentration of control in the hands of a
very small group of grossly inexperienced and unsophisticated individuals,” he
wrote.
David
Yaffe-Bellany covers cryptocurrencies and fintech. He graduated from Yale
University and previously reported in Texas, Ohio, Connecticut and Washington,
D.C. @yaffebellany
William K.
Rashbaum is a senior writer on the Metro desk, where he covers political and
municipal corruption, courts, terrorism and law enforcement. He was a part of
the team awarded the 2009 Pulitzer Prize for Breaking News. @WRashbaum •
Facebook
Matthew
Goldstein covers Wall Street and white-collar crime and housing issues. @mattgoldstein26
.jpg)
.webp)
Sem comentários:
Enviar um comentário