Sam Bankman-Fried arrested in the Bahamas on eve of congressional testimony



12 Dec 2022

Sam Bankman-Fried arrested in the Bahamas on eve of congressional testimony

Sam Bankman-Fried, the former CEO of the FTX crypto exchange, was detained in the Bahamas just one day before he was scheduled to testify virtually before the U.S. House Financial Services Committee for its first hearing on the collapse of the company.

The surprise arrest followed receipt of formal notification from the U.S. that it filed criminal charges against Bankman-Fried and is likely to request his extradition. 

“The Bahamas and the United States have a shared interest in holding accountable all individuals associated with FTX who may have betrayed the public trust and broken the law,” Prime Minister Philip Davis said a statement from the Office of the Attorney General & Ministry of Legal Affairs that was distributed by local press. “While the United States is pursuing criminal charges against SBF individually, the Bahamas will continue its own regulatory and criminal investigations into the collapse of FTX.”

The news was confirmed by the U.S. Attorney’s Office for the Southern District of New York. 

“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. We expect to move to unseal the indictment in the morning and will have more to say at that time,” the office said on Twitter.

The arrest comes 31 days after FTX filed for bankruptcy following a sudden and epic collapse that shook the crypto world and made the one-time wunderkind into a disgraced pariah. In an interview published by Fortune just hours before he was detained, Bankman-Fried said be hadn’t been thinking about trials or “anything like that” and was solely focused on on getting bank value for users.

“I’m not thinking that far ahead right now,” he told The Block in an interview with The Scoop podcast last week. “There’s going to come a time when we have to think further ahead about my life … but I have no idea long term what I’ll end up doing.”

`Quite overbooked’

Earlier Monday, Bankman-Fried said he couldn’t travel to Washington, D.C. due to his busy schedule and security concerns.

“I’m quite overbooked and was not planning to be testifying until, like, very recently,” Bankman-Fried said in an interview on Twitter Spaces. “From a security standpoint … It’s very difficult for me to move right now and travel because just, like, the paparazzi effect is quite large.”

Later in the day, Senate lawmakers blasted Sam Bankman-Fried for declining to appear at a separate hearing this week, calling his decision an “unprecedented abdication of accountability.”

“Virtually every CEO, financial regulator, and administration official for Republicans and Democrats has agreed to testify in front of both the Senate and House when called upon – that is how congressional oversight works,” Committee Chair Sherrod Brown, D-Ohio, and ranking Republican Sen. Pat Toomey, R-Pa., said in a statement. “He has declined in an unprecedented abdication of accountability.”

John Ray, the new FTX CEO appointed to oversee the company’s bankruptcy process, on Monday laid out the core structural flaws that led to the collapse of the multi-billion dollar empire early last month in a written statement ahead of his appearance tomorrow before the House Financial Services Committee.

He noted an unprecedented “utter failure of corporate controls at every level of an organization.”

(Updates with background details throughout. With reporting assistance from Stephanie Murray and Colin Wilhelm.)

Disclaimer: Beginning in 2021, Michael McCaffrey, the former CEO and majority owner of The Block, took a series of loans from founder and former FTX and Alameda CEO Sam Bankman-Fried. McCaffrey resigned from the company in December 2022 after failing to disclose those transactions.


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