Crypto Jumps on the Arrest of Sam Bankman-Fried

Bitcoin has risen above $17,500 for the first time in a month with ethereum also nearing $1,300 on the announcement by US Attorney Damian Williams that:

“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.”

No picture of his arrest has yet been released, but the Bahamas authorities have also confirmed that the FTX founder has been arrested.

That’s just hours before he was to testify in front of Congress with the arrest taking lawmakers by surprise. Lee Zeldin, NY’s representative, said:

“Tomorrow, Sam Bankman-Fried was scheduled to testify in front of the House Financial Services Committee. House GOP was ready to grill him six ways to Sunday.

Now breaking tonight, SBF was just arrested!🧐

Why not allow him to 1st testify tomorrow and answer our many questions?”

Few expected any real revelation from this testimony, however, with an unverified draft testimony suggesting Bankman-Fried was to testify he had access to all his accounts removed, and therefore could not provide as much detail as he would have liked.

The arrest is about one month after the collapse of FTX, with the charges expected to include wire fraud, wire fraud conspiracy, securities fraud, securities fraud conspiracy and money laundering.

Based on those charges, he could face life in prison with the Securities and Exchanges Commission also filing civil charges for defrauding private equity investors.

“FTX operated behind a veneer of legitimacy Mr. Bankman-Fried created by, among other things, touting its best-in-class controls, including a proprietary ‘risk engine,’ and FTX’s adherence to specific investor protection principles and detailed terms of service. But as we allege in our complaint, that veneer wasn’t just thin, it was fraudulent,” said Gurbir S. Grewal, Director of the SEC’s Division of Enforcement, before adding:

“While we continue to investigate FTX and other entities and individuals for potential violations of the federal securities laws, as alleged in our complaint, today we are holding Mr. Bankman-Fried responsible for fraudulently raising billions of dollars from investors in FTX and misusing funds belonging to FTX’s trading customers.”

A hearing is now to be held in Bahamas for extradition to US where a trial will then be held in New York.

That in effect closes this chapter where the wider crypto space is concerned, with the SBF arrest showing clearly that there are consequences for touching customers’ money.