The deposed boss of the cryptocurrency platform, the young man is under threat of criminal prosecution for his role in the spectacular collapse of the company.
Sam Bankman-Fried, the fallen cryptocurrency star and former boss of the platform FTXwas arrested in the Bahamas on Monday, December 12 at the request of US authorities, announced Damian Williams, a New York prosecutor. “We will have more information to give on the indictment” Tuesday morning, he clarified in his tweet. “SBF” will appear Tuesday in a court in the capital, Nassau.
The United States has “complained” against the thirties and “will probably seek his extradition”, Bahamas Attorney General Ryan Pinder said in a statement posted on Twitter. The two countries “have an interest in holding accountable individuals associated with FTX who may have betrayed the public trust and broken the law”, said Philip Davis, the prime minister of the kingdom, an archipelago located northeast of Cuba. The Bahamas will conduct its own “criminal investigation into the collapse of FTX,” he added, quoted in the statement.
The collapse of the FTX group appears to be the result of the absolute concentration of control in the hands of a very small group of grossly inexperienced and unsophisticated individuals. »
John Ray, new boss of FTX
“SBF” had been making media appearances for a month, despite the risk of a lawsuit for fraud after the spectacular implosion of the company, valued at 32 billion dollars at the start of the year. He was supposed to speak before a House of Representatives parliamentary committee on Tuesday, just like John Ray, the new boss of FTX. The ex-leaders of the bankrupt platform have shown a “complete failure” at all levels of control, spending without really counting the money of their customers, said this last Monday, in a document published on the eve of the hearing in Congress.
At first glance, “the collapse of the FTX group appears to be the result of the absolute concentration of control in the hands of a very small group of grossly inexperienced and unsophisticated individuals, who have not implemented any of the systems or controls required for a company in which other people’s money or assets are entrusted’, underlined John Ray. Considered one of the world’s leading cryptocurrency exchanges, FTX was suddenly unable to return the money they had deposited there to its customers in early November. The group announced its bankruptcy filing on November 11.
“Spending spree”
“I never tried to scam anyone”, assured Sam Bankman-Fried at the end of November during a conference organized by the New York Times. “I clearly made a lot of mistakes and I would give anything to be able to do some things again.” The former muse of cryptos has chosen to multiply interviews and speeches on Twitter, despite the seriousness of the accusations against him. A graduate of the Massachusetts Institute of Technology, the son of law professors at Stanford University, he had managed to legitimize cryptocurrencies with the general public and the political class. But his contrite air and his hesitant tone during his recent speeches offer a striking contrast to the reassuring image he has forged for himself in recent years.
The investigation has already shown that the assets deposited by customers on FTX were mixed with those of the brokerage and crypto investments company Alameda, also founded by Sam Bankman-Fried. And Alameda gleefully dipped into FTX client funds to make risky bets. Such use of these funds would constitute fraud if it flouted the terms of the agreement between FTX and its clients, believe many lawyers.
FTX has also embarked on a “spending spree” from the end of 2021, with 5 billion dollars in companies and investments “which may only be worth one serving” of that, according to John Ray. The platform has also disbursed, in loans or payments, more than a billion dollars intended for people within the company. For the new leader, who has overseen several bankruptcy procedures, including that of the former American energy giant Enron, the objective is now to “maximizing value” assets still held by FTX to repay the group’s customers and creditors as much as possible.