The embattled Chief Executive Officer of FTX exchange, Sam Bankman-Fried was arrested hours ago. The Royal Bahamas Police arrested the former CEO of the exchange at the request of the United States authorities. It is important to know that in recent times, Sam Bankman-Fried alongside other executives of the bankrupt FTX has been the subject of several class actions. Industry players say the arrest may be connected to one of these legal cases.
Furthermore, Damian Williams, a United States Attorney for the Southern District of New York tweeted the basis of the arrest. He said the arrest was based on an indictment that will be unsealed later today. Similarly, the New York Times revealed that the charges could include multiple indictments. They could include wire fraud, securities fraud, and money laundering.
Significantly, the Bahamian Prime Minister, Philip Davis who oversees the jurisdiction where Sam Bankman-Fried was arrested reiterates the relationship between the Bahamas and the United States. He said "The Bahamas and the US have a shared interest in holding all individuals associated with FTX accountable. He added that all the individuals who may have betrayed the public trust and broken the law." Industry players say the United States will request extradition— corroborated by Ryan Pinder, Bahamas Attorney General.
Since Sam Bankman-Fried's arrest, there has been speculation on the events to follow and who the next individuals that will be arrested could be. Similarly, the arrest has generated speculations that the former executives may face the law. These individuals include Caroline Ellison and Sam Trabucco.
Reacting to the speculations on the upcoming events surrounding Sam Bankman-Fried's arrest, Braden Perry said "a lot depends on the sealed indictment." Braden Perry is an industry player and the former senior trial attorney at the Commodity Futures Trading Commission. He doubles as a Partner at Kennyhertz Perry, a law firm.
Furthermore, he identified the likely charges that warranted the arrest and the individuals that could be arrested. He said "If the US alleges conspiracy to commit any of the crimes, there could be several FTX executives charged. Based on the commingling concerns, I would not be surprised if Ellison Trabucco and potentially others are charged." However, it is unclear who the "potentially others" are.
Significantly, Braden Perry said law enforcement has been working on the indictment for days. He identified the urgency of the US authority wanting Sam Bankman-Fried in custody.
Furthermore, he revealed that the embattled former CEO of the FTX exchange was supposed to testify at the White House Financial Services Committee on Tuesday. However, he did not show up and refused to testify. Braden Perry said, "the arrest may have been due to his refusal to testify in person and remain overseas."
Similarly, he added that there were speculations that Sam Bankman-Fried plans to flee the Bahamas for a non-extradition country. He said the speculation could also be the reason for the swift arrest.