Key Takeaways
- Sam Bankman-Fried has been arrested within the Bahamas and faces extradition to US
- Alameda CEO Caroline Ellison was reportedly noticed in New York
- Former CEO Sam Trabucco resigned in August and has largely averted the identical ranges of scrutiny as the opposite two
Oh, Sam.
Disgraced FTX founder Sam Bankman-Fried was arrested Monday by the Bahamas Police Force, after the US filed prison prices in opposition to him. The Bahamas have said that it expects US additionally to request extradition imminently.
“As a result of the notification received and the material provided therewith, it was deemed appropriate for the Attorney General to seek SBF’s arrest and hold him in custody pursuant to our nation’s Extradition Act,” the assertion, attributed to Attorney General Ryan Pinder, mentioned.
Charges in opposition to Bankman-Fried reportedly embody wire fraud, wire fraud conspiracy, securities fraud, securities fraud conspiracy and cash laundering. The prices may land Bankman-Fried many years in jail. Whoops.
What occurs subsequent?
That’s a cool collection of prices, revealing Bankman-Fried actually did do all of it.
He was meant to testify earlier than the House Financial Services Committee at 10AM EST right this moment on listening to about the FTX crash. That is now not the case, as a substitute, Bankman-Fried will seem in Magistrate Court in Nassau, Bahamas.
Once Bankman-Fried will get again on American soil, a trial received’t occur anytime quickly. This is against the law of historic scale throughout myriad jurisdictions, and the case will take a variety of time.
The SEC additionally made separate prices that Bankman-Freid defrauded traders.
We allege that Sam Bankman-Fried constructed a home of playing cards on a basis of deception whereas telling traders that it was one of many most secure buildings in crypto,” mentioned SEC Chair Gary Gensler. “The alleged fraud committed by Mr. Bankman-Fried is a clarion call to crypto platforms that they need to come into compliance with our laws.”
What occurs Caroline Ellison?
The elephant within the room is what occurs to Alameda CEO Caroline Ellison. Alameda is the buying and selling agency additionally based by Bankman-Fried, and the place buyer funds on FTX had been despatched to so as to shore up massive buying and selling losses.
Ellison was thought to have been in Hong Kong on the time of the arrest, however she could have been noticed at a café in Manhattan, that means she is already on US soil.
PLEASE CONFIRM: A consumer claims that they noticed Caroline Ellison at Ground Support Coffee on West Broad in SoHo Manhattan at 8:15 AM. This would imply she just isn’t in Hong Kong and is in NY not in custody. pic.twitter.com/QUduYO9GfZ
— Autism Capital ???? (@AutismCapital) December 4, 2022
This sparked hypothesis {that a} plea deal could have been reached, though that’s all hypothesis.
Bankman-Fried has repeatedly denied that he had full oversight over all operations, contesting that he “wasn’t running Alameda” and “he didn’t know the size of their position”.
This means that Bankman-Fried is throwing Ellison, his former girlfriend, beneath the bus. Ellison has not tweeted since November 9th, with radio silence for the reason that chapter.
She had beforehand tweeted on November 6th to Binance CEO Zhao, trying to purchase the collapsing FTT tokens – the low liquidity native token of the FTX change that was artificially propping up the entire ecosystem – from Zhao at $22 per share (Zhao himself can be facing criminal charges referring to a separate case).
Time will inform what occurs to Ellison, but it surely appears nearly inconceivable to imagine that each Bankman-Fried and Ellison weren’t conscious of what was taking place at each their corporations, given the dimensions of the harm – $8 billion. That and the truth that that, you recognize, they had been each CEOs of the respective entities.
What about Sam Trabucco?
Then there may be the case of Sam Trabucco.
Trabucco is the previous co-CEO of Alameda, alongside Ellison. His timing was, how ought to I say this, fascinating. He introduced his retirement lower than three months earlier than the home of playing cards collapsed, when Ellison grew to become the only CEO.
In an notorious tweet thread, he cited growing work hours and a change of priorities for stepping down.
“I’ve reached a point in my life where I want other things. What other things? I’m not really sure, exactly. Lately I’ve been really happy, spending a lot of time travelling, visiting friends and family, working on ‘myself’ and whatnot. Also I bought a boat, that’s been cool”.
I’m undecided why Trabucco just isn’t dealing with scrutiny. The LUNA demise spiral of May is supposedly what triggered a variety of the losses for Alameda that led to the commingling of funds from FTX. It was three months after this collapse, in August, that Trabucco resigned. As CEO, he will need to have identified what was happening, but is basically escaping scrutiny.
He additionally has gone silent for the reason that chapter, his last tweet from November 8th wishing that the “road ahead is brighter”.
Much like to everybody — I’m certain the previous few days have been darkish for a lot of and I hope the highway forward is brighter.
— Sam Trabucco (@AlamedaTrabucco) November 8, 2022
He was additionally revealed to have bought two properties value $8.7 million in all money final yr. This is along with the yacht buy talked about above, which he reportedly employed a freelancer on Fiverr to design the brand for (he named it “Soak my Deck” apparently).
So allow us to not neglect that he’s a key determine in all this.
Final ideas
There will possible be extra twists within the story, however now that one of many three prime execs are arrested, I’m curious to see what will occur the opposite two.
Bankman-Fried’s trial possible received’t begin for fairly some time, and the entire thing received’t be resolved for years. As for the opposite two, all bets are off, however I might be stunned in the event that they don’t obtain a knock on their doorways anytime quickly.
What an entire mess, and a tragic story for your entire trade.
