FTX founder Sam Bankman-Fried had been arrested in the Bahamas on Monday at the behest of U.S. prosecutors, a day before he was due to testify before Congress about the sudden failure of one of the world’s largest cryptocurrency exchanges last month.
The arrest came as Bankman-Fried was preparing to get back at his former lawyers at Sullivan and Cromwell, new FTX CEO John Ray and rival exchange operator Binance at a Congressional hearing.
Notably, a draft copy of the testimony was seen by Reuters. According to the draft copy, Bankman-Fried planned on saying that he was pressured by Sullivan and Cromwell lawyers to nominate Ray as CEO after the sudden exodus of customer funds. According to him, when he changed his mind within minutes after an offer of billions of dollars of fresh funding, he was apparently told that it was too late.
However, according to Congresswoman Maxine Waters, Bankman-Fried will now be unable to testify. When asked to comment on Bankman-Fried’s arrest she stated that she was surprised to hear of his arrest. Ray’s testimony will go ahead.
According to Bahamian police, Bankman-Fried was arrested momentarily after 6:00 pm Monday (2300 GMT) at his apartment complex, Albany which is a luxury gated community and will appear in a magistrate court on Tuesday. The Bahamas attorney general’s office stated that he is expected to be extradited to the United States.
A spokesman for the U.S. Attorney’s office in Manhattan has confirmed the arrest of Bankman-Fried in the Bahamas. However, they declined to comment on the charges.
According to U.S. prosecutors, they had already sealed charges against Bankman-Fried and the charges will be revealed on Tuesday. According to reports published by The New York Times, he is currently facing fraud and money laundering charges. The regulator said on Monday that the U.S. Securities and Exchange Commission has separately authorized charges relating to Bankman-Fried’s violations of securities laws.
Bankman-Fried and his lawyer Mark Cohen have yet to respond to requests for comment. Sullivan and Cromwell, FTX, Ray, and Binance also did not make any comments according to Reuters.
Bankman-Fried has commented that he doesn’t think he has any criminal liability. In an interview at the New York Times’ Dealbook Summit on Nov.30, Bankman-Fried said, “I didn’t ever try to commit fraud”.
