Go To Jail, Crypto Weirdo Sam Bankman-Fried, Go To Jail FOREVER

Bloggers can say they're dopes who don't understand crypto. Crypto CEOs not so much.

Sam Bankman-Fried, the former CEO of huge defunct crypto firm FTX, was arrested Monday in the Bahamas at the request of US prosecutors who have filed fraud charges against him just because his fake-money empire collapsed last month, losing something like $8 billion in real money. Damian Williams, US Attorney for the Southern District of New York, confirmed that Bahamian authorities arrested Bankman-Fried, and that an indictment against him would be unsealed today. Oh, here it is! Multiple conspiracy counts for defrauding investors and also the United States, commodities and securities fraud, and even charges of violating campaign finance laws for his donations to political campaigns.

The Securities and Exchange Commission also piled on, saying the freaky hobbit would be charged with violating securities laws. The New York Times reports the charges against him include "wire fraud, wire fraud conspiracy, securities fraud, securities fraud conspiracy and money laundering," according to a "person with knowledge of the matter."

At some point, Bankman-Fried will be extradited to the US to face trial.

Among other shady business, Bankman-Fried is accused of illegally transferring FTX investors' funds to another company he owned, Alameda Research, its trading affiliate, which as the Times explains is neither very legal nor very cool. Here's the Times summary:

The S.E.C. now asserts that S.B.F. was more involved in Alameda’s operations than he let on. In a major revelation, the agency says he directed $8 billion worth of customer deposits from an Alameda-controlled bank into a separate account, labeled “fiat @ftx.com,” in part to avoid getting charged interest, a move that could suggest intent.

Bankman-Fried's defense for FTX's collapse has largely been to pretend that he's just a goofy confused dork who didn't know what he was really doing, bro, don't be mad, all this financial stuff is really confusing, you know? Which is the sort of thing that some blogger with a doktorate in English might get away with, but doesn't really wash when it's coming from a financial CEO who bilked a million investors and crashed much of what was left of the cryptocurrency market. Over the weekend, he told the BBC, "I didn’t knowingly commit fraud. [...] I didn’t want any of this to happen. I was certainly not nearly as competent as I thought I was."

And also, maybe he forgot financial fraud was a crime. Steve Martin should demand royalties. 

In addition, the Times notes that SBF went on a podcast called "Unusual Whales" Monday, where he

initially denied knowing that customer funds had moved from FTX to Alameda without permission, but then professed less certainty: “Like I, like, kind of vaguely knew, kind of, sort of maybe, um, on a qualitative level what was going on.”

You know how that goes. You're just kind of on cruise control and vaguely paying attention, and then oh shoot, you did some securities fraud. Man, if I had a billion dollars for every time I've illegally moved investors' cash around between different financial entities I control, I'd have zero billion dollars.

Bankman-Fried had been scheduled to testify remotely this morning before the House Financial Services Committee, chaired by Rep. Maxine Waters (D-California), and even there, according to a copy of his opening statement obtained by several outlets, the twee fucker had planned to explain, formally, that he's just a guy, what does he know?

“"I would like to start by formally stating, under oath: I f*&ked up." — Disgraced former FTX CEO Sam Bankman-Fried was prepared to open his congressional testimony this way today, per Reuters. Instead, he was arrested in the Bahamas.”

— The Recount (@The Recount) 1670934182 

Reuters reports that after his opening statement, "I would like to start by formally stating, under oath: I fucked up," Bankman-Fried was set to explain how things went very badly at FTX and everyone else was at fault, too, and to claim he was pressured into stepping down as CEO just as he was about to get an offer of billions of dollars that would have saved FTX, you bet, but by then he'd already resigned, you see.

Today's hearing will still go forward; Maxine Waters said in a statement that she was "surprised to hear" about the sleazy little twerp's arrest, adding that it's darn well time he's being brought to justice, but also that

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 public has been waiting eagerly to get these answers under oath before Congress, and the timing of this arrest denies the public this opportunity. While I am disappointed that we will not be able to hear from Mr. Bankman-Fried tomorrow, we remain committed to getting to the bottom of what happened

Instead of SBF, the committee will hear from FTX's current CEO, John Ray, who probably won't be a big asshole about everything, either.

[ NYT / CNN / Image:  Cointelegraph, Creative Commons License 3.0 ]

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