The Arrest of FTX CEO Sam Bankman-Fried (Updated)

What we know about FTX CEO Sam Bankman-Fried’s (SBF’s) arrest last night in the Bahamas following the implosion and bankruptcy of the cryptocurrency exchange he founded…

the arrest

    • Royal Bahamas Police Force announced SBF’s arrest shortly after 6p local time yesterday for what it said were offenses against the United States and The Bahamas. Read it. SBF had just said earlier in the day that he didn’t think he would be arrested.
    • Bahamas Attorney General says that it will continue its own “regulatory and criminal investigations” into SBF while the U.S. pursues its criminal charges. The release is here.
    • The State District Attorney’s office in New York State announced Bankman-Fried’s arrest in a tweet saying that it will reveal an indictment this morning. See the charges below.
    • The Securities Exchange Commission quoted its top enforcement official, Gurbir Grewal, who congratulated law enforcement on SBF’s arrest and announced his agency’s intent to pursue “separate charges for violations of securities laws violations.” Read the tweet. See the charges below.
    • More from The NY Times, WSJ and a wild story from Bloomberg on lawyer complaints about an exchange between the Bahamian government and SBF.

this week’s hearings

    • No SBF – In a press release last night, Chairwoman Maxine Waters (D, CA) announced that SBF will not appear at today’s House Financial Services hearing: “We received confirmation this afternoon from Mr. Bankman-Fried and his lawyers that he was still planning to appear before the Committee tomorrow, but then he was arrested.” Read the release.
    • Tuesday’s hearing with House Financial Services titled “Investigating the Collapse of FTX, Part I,” is scheduled to move forward today at 10:00a. with only the current FTX CEO John J. Ray. Live stream. (See wrap-up)
    • Prepared Testimony – John J. Ray – for today’s HFS hearing, Current FTX CEO Ray: “While many things are unknown at this stage, and many questions remain, we know the following: First, customer assets from FTX.com were commingled with assets from the Alameda trading platform…” Read Ray’s entire prepared testimony here.
    • Prepared Testimony – SBF – This is what Bankman-Fried submitted to the House Financial Services Committee but never presented due to his arrest: read it on Forbes.
    • Wednesday’s hearing with Senate Banking titled “Crypto Crash: Why the FTX Bubble Burst and the Harm to Consumers,” is scheduled to move ahead tomorrow (12/14) with its existing agenda. It never included SBF, who never agreed to appear. Live stream.

the charges

    • SEC – This morning, the SEC revealed its charges against SBF accusing him of  “a years-long fraud to conceal from FTX’s investors the undisclosed diversion of FTX customers’ funds to Alameda Research LLC, his privately-held crypto hedge fund…” and more. Read the release. And, download the 28-page formal complaint against Bankman-Fried here.
    • CFTC – Read the CFTC’s press release. And, see the 40-page formal complaint against Bankman-Fried by the CFTC here.
    • SDNY – See the 14-page formal indictment by the Southern District of New York (SDNY) of Sam Bankman-Fried. View.

Congress reacts

    • Senate Banking Chair Senator Sherrod Brown (D, OH) applauded SBF’s arrest in a tweet.
    • Senate Banking member Senator Cynthia Lummis (R, WY) said in a tweet, “What happened at FTX appears to be good, old-fashioned fraud…” She added that her Responsible Financial Innovation Act (RFIA) “would prevent future collapses like FTX.” For crypto proponents, this may have been the most hopeful message of the night: Congress is still interested in crypto legislation.
    • Rep. Lee Zeldin (R, NY) tweeted his dissatisfaction with the timing of the arrest last night saying, “Why not allow him to 1st testify tomorrow and answer our many questions?” Read more.
    • Senator Elizabeth Warren (D, MA) tweeted, “Crypto executives who break the law are just like any other crooks. If Sam Bankman-Fried committed fraud, then federal prosecutors should send him to prison.” More.
    • Rep. Patrick McHenry (R, NC) said on CNBC: “Regulators have clearly failed here” and added, “There is no means to be a regulated exchange in the U.S.” Finally, he said, “[SBF] was a manipulator of world class.”