Sam Bankman-Fried, former CEO of FTX, arrested in the Bahamas.

Sam Bankman-Fried arrested in the Bahamas. He should be urgently extradited to the United States, where he is awaiting trial.

It looks like former FTX CEO Sam Bankman-Fried won’t be testifying in Congress after all. The man was arrested in the Bahamas and should be urgently extradited to the United States to stand trial.

Sam Bankman-Fried arrested in the Bahamas

The news of his arrest is quite surprising given the Department of Justice’s announcement a few days ago that it was “closely” looking into his role in the cryptocurrency exchange crash, which is expected to leave another 1 million individual investors undisclosed. The Justice Department made the announcement during a meeting with the exchange’s bankruptcy team to discuss whether FTX improperly transferred hundreds of millions of dollars just before filing for bankruptcy in late November.

Sam Bankman-Fried was scheduled to testify before Congress before the House Financial Services Committee on Thursday. However, prosecutor Damian Williams explained that Sam Bankman-Feed was taken into custody on a charge that will be clarified very soon.

“Of course I made a lot of mistakes. There are things for which I would give everything I have to do them again, ”he tried to explain to the New York Times. “I have never tried to commit any kind of fraud on anyone.”

The Bahamas government is also accused of complicity with FTX itself. Lawyers for the company said that the Bahamas, as a government entity, helped Sam Bankman-Freed transfer the funds shortly before filing for bankruptcy.

He should be urgently extradited to the United States, where he is awaiting trial.

Sam Bankman-Fried stepped down as FTX CEO in November to be replaced by John J. Ray III, who had already overseen the Enron bankruptcy. In his statements to Congress, he painted a very grim picture of his latest operations. So FTX spent $5 billion in late 2021, early 2022, “buying a lot of companies, making as many investments, most of which may have been worth only a fraction of the amount they bought,”providing many loans and payments for more over $1 billion to “insiders”. These funds were also heavily pegged to another Sam Bankman-Fried company, Alameda Research, which also used client funds for high-risk trading.

Sam Bankman-Freed can spend very long years in prison. Mail fraud and bank fraud alone could have landed him a life sentence without parole. Former Theranos CEO Elizabeth Holmes and COO Sunny Balwani were recently sentenced to 11 and 12 years in prison respectively for their involvement in fraud at their company. Bernie Madoff was sentenced to 150 years in prison in 2009, and in 2006 Jeff Skilling was sentenced to 24 years in prison for his role in the downfall of Enron.

USA Damian Williams: Earlier this evening, Bahamian authorities arrested Samuel Bankman-Fried at the request of the US government based on a closed indictment filed by SDNY. We expect to move on to uncovering the indictment in the morning, by which time we will have more information.

— SDNY U.S. Attorney (@SDNYnews) December 12, 2022