SBF faces life imprisonment if convicted.
Embattled FTX founder Sam Bankman-Fried has been arrested in the Bahamas at the request of the US Department of Justice based on sealed charges filed in the Southern District of New York, per a tweet attributed to Damian Williams, US Attorney for the Southern District of New York.
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
The charges against SBF include wire fraud, wire fraud conspiracy, securities fraud, securities fraud conspiracy, and money laundering, the New York Times reports citing a person with knowledge of the matter. Consequently, the disgraced crypto founder risks serving a life term in prison if found guilty on all counts. Bahamian authorities say the request from the DoJ indicates that extradition is likely, as reported by The New York Times.
Meanwhile, the US Securities and Exchange Commission has said it is also preparing to file separate charges on securities violations in response to the DoJ charges. The tweet attributed to SEC director of enforcement Gurbir Grewal says the financial regulator will publicly file the charges in the Southern District of New York today.
Gurbir Grewal: We commend our law enforcement partners for securing the arrest of Sam Bankman-Fried on federal criminal charges. The SEC has authorized separate charges relating to his violations of securities laws, to be filed publicly tomorrow in SDNY. https://t.co/ON0LgY4mf4
— U.S. Securities and Exchange Commission (@SECGov) December 13, 2022
It bears mentioning that SBF was scheduled to testify before the House Financial Services Committee today on the collapse of his crypto exchange. However, his arrest makes his appearance impossible.
In a statement yesterday, Rep Maxine Waters, chair of the House Committee, while expressing surprise at the arrest, conceded that it was high time law enforcement kicked off the process to bring the crypto founder to justice. The lawmaker, however, expressed disappointment that the American people looking forward to the hearing will not get the chance to get answers from SBF.
“Although Mr. Bankman-Fried must be held accountable, the American public deserves to hear directly from Mr. Bankman-Fried about the actions that’ve harmed over one million people, and wiped out the hard-earned life savings of so many,” the statement read. “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.”
FTX, the global crypto exchange, collapsed in early November after a bank run confirmed the illiquidity of the entity, likely due to reported fraudulent financial practices. Notably, it appears that SBF gave a huge loan to Alameda Research, the crypto exchange’s sister trading firm, from customer deposits, without the knowledge of customers and against promises made in the firm’s terms of service agreement that says it can not under any circumstances lend out customer funds.
In the aftermath of the collapse, John Ray III, overseeing the restructuring process as part of bankruptcy proceedings, has revealed in court filings findings that point to the mismanagement of corporate and customer finances.
SBF, on his part, in several interviews that he has given since, has denied any claims of fraud. Instead, the crypto founder champions a narrative of gross negligence and ineptitude while finding ways to dodge or misdirect burning questions, much to the chagrin of the crypto community.
While the crypto community has been waiting for this arrest, some members have indicated that they do not want to get too excited just yet over fears of the political influence SBF may control due to massive campaign donations.
In recent interviews, the erstwhile billionaire has said he has only $100,000 left in his account. It will be interesting to see how he secures legal financing.
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Source: https://thecryptobasic.com/2022/12/13/life-imprisonment-as-sbf-arrested-in-bahamas-on-fraud-money-laundering-charges-at-request-of-us-doj/?utm_source=rss&utm_medium=rss&utm_campaign=life-imprisonment-as-sbf-arrested-in-bahamas-on-fraud-money-laundering-charges-at-request-of-us-doj