FTX’s Sam Bankman Fried has been arrested in the Bahamas, preventing him from attending today’s ‘Softball’ US Congressional hearing

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After a long, restful slumber, allowing FTX’s Sam Bankman Fried (SBF) to embark on an ambitious media tour de force to plead his innocence, the wheels of justice have finally recovered from their slumber, and the crook is now on his way to a well-deserved stay in jail.

Sam Bankman-Fried has now been arrested by authorities in the Bahamas after the United States Attorney for the Southern District of New York filed an indictment sealed with the Bahamas government. The indictment is a precursor to SBF’s extradition to the United States for trial and includes charges of wire fraud, securities fraud, and money laundering.

Separately, the US Securities and Exchange Commission authorized a securities law violation lawsuit against Sam Bankman Fried. Meanwhile, the Bahamas is also expected to continue its regulatory and criminal investigations into the collapse of FTX.

For starters, cryptocurrency exchange FTX has maintained an undisclosed synergistic relationship with Sam Bankman-Fried’s cryptocurrency trading arm, Silvergate Bank’s cryptocurrency trading arm Alameda Research, allowing Alameda the convenience of borrowing FTX clients’ funds after collateral is deployed in the form of tokens. illiquid tokens, including FTX’s internal FTT token.

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However, this house of cards collapsed when Alameda’s huge exposure to the FTT token became public in early November, prompting Binance to dump its FTT holdings, sending the token’s price crashing. Amidst the scuffle, Alameda Research CEO Carolyn Ellison dumped the trading company’s lowest price on the FTT token, inviting a veritable onslaught of speculative attacks. With Alameda’s ability to repay its obligations weakening because its collateral of illiquid tokens quickly lost their inflated values, and with soaring customer withdrawals sending banks flooding in, FTX had no choice, in the end, to declare bankruptcy.

Interestingly enough, Sam Bankman-Fried spent most of his time doing media interviews. However, all of these public appearances maintained a consistent theme: that the SBF didn’t really know what was going on, that it was innocent and a victim of an unfortunate chain of events. Just yesterday, the disgraced former CEO of the now-defunct FTX corporation was featured in a virtual interview on Twitter Space by Unusual whales To answer FTX crash related questions, all the time Play a video game.

We noted last week that Sam Bankman-Fried was obligated to attend two consecutive congressional hearings this week. The US House of Representatives Financial Services Committee is scheduled to hold a hearing regarding the collapse of FTX on December 13th. Then, on the 14thThe tenth In December, the US Senate Committee on Banking, Housing, and Urban Affairs is scheduled to hold a separate hearing.

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In anticipation of the congressional hearing, FTX’s new CEO John J. Ray III, a veteran attorney who oversaw the Enron bankruptcy, leveled serious allegations against Sam Bankman-Fried in his prepared remarks, including improper security protocols about FTX client assets, Which allowed Alameda to facilitate the borrowing of FTX funds without “any effective limit”, the blending of assets, the lack of proper documentation against nearly 500 investments made by FTX, and the absence of any independent governance throughout FTX.

However, now that Sam Bankman-Fried has been arrested, his appearance at congressional hearings is highly unlikely. On an interesting note, the SBF has reported its willingness to attend the hearing on the 13thThe tenth In December, led by Representative Maxine Waters, but he refused to attend the session of the US Senate on the 14thThe tenth Dec. This development has accelerated the view that the SBF may face “softball” questions at the House hearing, judging by the usually rebellious former CEO of FTX’s willingness to attend and his intimate relationship with some of the prominent members of the House committee. Of course, today’s arrest has put more melodrama about SBF on hold, for now at least.

Do you think FTX customers will come back again? Let us know your thoughts in the comments section below.

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