Sam Bankman-Fried, the fallen cryptocurrency star and former boss of the FTX platform, was arrested in the Bahamas on Monday at the request of US authorities, announced Damian Williams, a New York prosecutor.
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“We will have more information to give on the indictment” Tuesday morning, he said in a tweet, without further details on the nature of the charges.
“SBF” had been making media appearances for a month, despite the risk of a lawsuit for fraud following the spectacular implosion of the company, valued at 32 billion dollars at the start of the year.
The United States has “filed a complaint” once morest the 30-year-old, who resides in the Bahamas, and “will probably request his extradition”, explained the Attorney General of the Bahamas, Ryan Pinder, in a press release relayed on Twitter.
“SBF” will appear in a court in the capital, Nassau, on Tuesday.
Both countries “have an interest in holding accountable individuals associated with FTX who may have betrayed the public trust and broken the law,” said Philip Davis, the premier of the northern archipelago. -eastern Cuba.
The Bahamas will conduct its own “criminal investigation into the collapse of FTX,” he added, quoted in the statement.
In the United States, “if he is convicted of fraud, he might spend the rest of his life in prison, given the amount,” said Jacob Frenkel, of Dickinson Wright.
“There would be no indictment if the prosecutors were not absolutely convinced that they will obtain a conviction”, added this specialist in federal investigations, who worked for the American stock market policeman (SEC).
“Not very knowledgeable”
Sam Bankman-Fried was supposed to speak before a House of Representatives committee on Tuesday, as was John Ray, the new boss of FTX.
The ex-executives of the bankrupt platform showed “complete failure” at all levels of control, spending without really counting the money of their customers, John Ray said on Monday, in a document published the day before. hearing in Congress.
At first glance, “the collapse of the FTX group appears to be the result of the absolute concentration of control in the hands of a very small group of grossly inexperienced and unsophisticated individuals, who have not implemented any of the systems or controls required for a company entrusted with other people’s money or assets,” the official said.
Considered one of the world’s leading cryptocurrency exchanges, FTX was suddenly unable to return the money they had deposited there to its customers in early November.
The group announced its bankruptcy filing on November 11.
“I have never tried to defraud anyone,” assured Sam Bankman-Fried at the end of November during a conference organized by the New York Times. “I clearly made a lot of mistakes and I would give anything to be able to do some things once more.”
The former muse of cryptos has chosen to multiply interviews and speeches on Twitter, despite the seriousness of the accusations once morest him.
A graduate of the Massachusetts Institute of Technology, the son of law professors at Stanford University, he had managed to legitimize cryptocurrencies with the general public and the political class.
But his contrite air and his hesitant tone during his recent speeches offer a striking contrast to the reassuring image he has forged for himself in recent years.
“Spending spree”
“It was a very risky strategy,” remarks Jacob Frenkel. In the end, it is “as if he had admitted that he behaved in a criminal way”.
The investigation has already shown that the assets deposited by customers on FTX were mixed with those of the brokerage and crypto investments company Alameda, also founded by Sam Bankman-Fried. And Alameda gleefully dipped into FTX client funds to make risky bets.
Such use of these funds would constitute fraud if it flouted the terms of the agreement between FTX and its clients, believe many lawyers.
FTX also embarked on a “spending spree” starting in late 2021, with $5 billion in ventures and investments “may only be worth a portion” of that, according to John Ray.
The platform has also disbursed, in loans or payments, more than a billion dollars intended for people within the company.
For the new leader, who oversaw several bankruptcy proceedings, including that of the former American energy giant Enron, the objective is now to “maximize the value” of the assets still held by FTX to reimburse customers and creditors as much as possible. of the group.
