FTX exchange and Alameda Research disgraced former CEO Sam Bankman-Fried was arrested hours ago in the Bahamas. He’s facing charges of fraud, money laundering and tax evasion in what’s alleged to have been a multi-billion dollar tax fraud scheme.
Bankman-Fried is said that he will be fighting the charges. The arrest also involves $2 billion cryptocurrency exchange FTX, which is backed by Alameda Research and SBF himself. Both SBF and FTX have denied that SBF had any involvement in illegal fraud. The case is likely to further ignite regulatory scrutiny of the crypto industry and its role in facilitating money laundering and tax evasion.
Regardless of who is or isn’t lying here, it’s clear that crypto entrepreneurs are under increasing pressure from regulators to prove their businesses are using best-in-class compliance measures. The SEC and other government agencies have been ratcheting up pressure on all cryptocurrencies.
In a statement from the Securities and Exchange Commission, they wrote:
“We commend our law enforcement partners for working to secure the arrest of Mr. Sam Bankman-Fried in the Bahamas on federal criminal charges. The Securities and Exchange Commission has separately authorized charges relating to Mr. Bankman-Fried’s violations of our securities laws, which will be filed publicly tomorrow in the Southern District of New York.”
In a letter from the Bahamian Royal Police, they wrote about the arrest of Bankman-Fried:
On 12 December 2022, the Office of the Attorney General of The Bahamas is announcing the arrest by The Royal Bahamas Police Force of Sam Bankman-Fried (“SBF”), former CEO of FTX. SBF’s arrest followed receipt of formal notification from the United States that it has filed criminal charges against SBF and is likely to request his extradition.
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.
At such time as a formal request for extradition is made, The Bahamas intends to process it promptly, pursuant to Bahamian law and its treaty obligations with the United States.
Responding to SBF’s arrest, Prime Minister Davis stated, “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. 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, with the continued cooperation of its law enforcement and regulatory partners in the United States and elsewhere.”
You can see and read the full letter below.