“Earlier this evening, Bahamian authorities arrested Samuel Bankman-Fried at the request of the US Government,” Damian Williams, the United States Attorney for the Southern District of New York, said Monday evening, in a tweeted statement.
Or at least I think it was him. It’s hard to know who’s who on Twitter these days, given that just anyone can pay Elon Musk for the verification check marks which used to help the public differentiate between noteworthy accounts and those belonging to random netizens.
The Bahamas Attorney General’s Office said Bankman-Fried’s arrest “followed receipt of formal notification from the United States that it has filed criminal charges” against the fallen crypto magnate. The US “is likely to request his extradition,” Bahamian authorities said.
The arrest was “based on a sealed indictment filed by the Southern District of New York,” Williams added. Manhattan prosecutors were said to be examining a possible link between the implosion of the Terra-Luna ecosystem and Bankman-Fried’s FTX and Alameda. Williams’s office began probing FTX months before its collapse in an inquiry related to compliance with the Bank Secrecy Act, according to separate reports.
Bankman-Fried recently hired Mark Cohen, who helped represent Ghislaine Maxwell, as his attorney. Caroline Ellison, meanwhile, enlisted Stephanie Avakian, who previously ran the SEC’s enforcement division, overseeing cases against Ripple, Robinhood and Musk, among others.
Anjan Sahni, a former federal prosecutor who spent more than a decade at the US Attorney’s Office for the Southern District, is a partner at the law firm where Avakian now works. Sahni, who ran the unit at the Southern District responsible for securities fraud, helped pursue parties to Bernie Madoff’s $65 billion fraud, and was vying for Williams’s position.
Williams on Monday said his office “expect[s] to move to unseal the indictment in the morning and will have more to say at that time.” The SEC was set to file charges separately.
Over the past several days, Bankman-Fried engaged US lawmakers keen to hear his side of the story as part of a congressional inquiry into the collapse of FTX. It wasn’t immediately clear what his arrest meant for his planned testimony.
“I’m quite overbooked,” he said Monday, explaining why he’d be testifying virtually. Just hours later, the word “booked” took on an entirely new meaning.
Read more:
FTX Bankruptcy: A Failure Of Everyone
M-Man, no surprise with this, it was just a matter of time.
My short take on Matt Levines article today is that it was a confidence game but without tacit collusion was bound to fail.
The young fellow shot himself in the foot. Some may say the charges are political, but sometimes it is warranted.
If only Matt had been given the chance to interview SBF ……….. oh, wait.
Matt Levine is not the only one that saw the emperor wearing clothes.
You know what I say Mr. H. Pyramid scheme, dressed in the emperors new clothes. I remember watching one of those pyramid schemes float through Brooklyn. Almost from the beginning to the end. The people in the early stages all know what the real deal is. The plan is to keep it going forever and then it will work for everyone as long as they think they are getting in early enough.
Almost Hollywoodish that the crypto fraud is named Bank Man. And Fried tacked on the end is the cherry on top.
@FuriousA, this occurred to me as well. Do we actually have agency?
Kind of reminds me of Eddie Murphy’s Mr. White sketch.
H-Man, this was no Ponzi scheme. SBF simply took other people’s money to make bets on crypto. What he forgot to tell those people was that he was going to use their money to bet on crypto which they never agreed to. When the bets soured, the investors lost all of their money. This is not a complicated case for the government to prosecute.
Apparently having a good hair stylist is not a prerequisite for fleecing idiots out of millions…
Caveat emptor?
In life, there are many occasions where the the right thing happens for the wrong reason. Example the Theranos people may actually go to jail, in part because they embarrassed the wrong people. Same with FTX.