Sam Bankman-Fried released. The ex-boss and founder of the cryptocurrency trading platform, FTX, declared bankrupt in early November, regained his freedom on Thursday, December 22, on bail of 250 million euros and several other conditions set by a federal judge in New York.
Indicted in the Bahamas for fraud and criminal association, Sam Bankman-Fried was arrested in Nassau on Monday December 13 “at the request of the American authorities” who filed a complaint against him and who were going “probably request his extradition”announced the Attorney General of the Bahamas, Ryan Pinder.
After his arrest, Sam Bankman-Fried appeared before a magistrate’s court in Nassau, in the presence of his family but also of the representatives of the embassy of the United States. The ex-FTX boss had refused to “waive his right to an extradition hearing”during which a judge must decide whether or not to extradite him to America.
“Impatient” to return to the United States
He was taken into custody because “the risk of flight was very high”, estimated the court of the capital of the Bahamas. SBF finally gave up contesting his surrender to the American authorities, wishing “offer full compensation to affected customers” and even mentioning his “impatience” to return to the United States. Extradited Wednesday evening from the Bahamas, where the headquarters of FTX was located, “He landed in New York with federal police, and could be brought before a federal district court judge as early as Thursday. Once formally charged, he will be asked whether he pleads guilty or not.” explained The Wall Street Journal.
The Wall Street Journalciting lawyers, explains that the founder of FTX consented to be extradited to express his willingness to cooperate with the authorities in order to benefit from bail or a reduced sentence. “Defendants can cooperate by providing information not only against certain people, but also on the whereabouts of certain assets”we explain.
On Thursday, a New York federal judge agreed to release him on a monster bail of $250 million. He was released from Manhattan federal court on Thursday evening.
SBF’s deposit is partly guaranteed by the Californian home of the parents. He will be placed under house arrest there pending his trial, according to the conditions approved by Judge Gabriel Gorenstein, who authorized the release of the 30-year-old accused because he presents, according to him, a risk of absconding. “minimal” and has never been convicted before.
The ex-boss of FTX is the subject of eight counts, including those of fraud, criminal association and money laundering. He is accused of having used, with collaborators, funds deposited on the platform by FTX clients to carry out speculative financial transactions with his other company, Alameda Research. He is also suspected of having invested part of this money in the acquisition of real estate in the Bahamas on a personal basis.
Sam Bankman-Fried, who was the second largest donor to the Democratic Party behind billionaire George Soros and an economic partner of the World Economic Forum, did not miss the opportunity presented to him by the NYT during the Dealbok Summit to to explain.
“Big mistakes” and “poor risk management”
During his speech, he said that he “had not deliberately mixed” funds from FTX clients with those from Alameda Research, a hedge fund. He also denied having committed fraud. “I never tried to defraud anyone”he said, affirming “not realizing how dangerous a position companies were in until it was too late”.
The founder of FTX also admitted to “big mistakes”dont “poor to non-existent risk management with no oversight to protect client accounts”.
Asked about donations to the Democratic Party, which amounted to $40 million, he said he had no intention “to buy off lawmakers”.
The global cryptocurrency exchange, FTX, valued at $32 billion at the start of the year, was no longer able to repay its creditors the money they had deposited there. The group filed for bankruptcy on November 11.
Bankruptcy restructuring expert John Ray III, who took over the reins of FTX, described the company’s situation in a damning court report released Thursday (November 17th). “In my 40-year career, I have never seen such a complete failure of corporate controls and such a complete absence of reliable financial information as has occurred [avec FTX]”.
In his report, the one who managed the liquidation of the energy giant Enron from 2001, revealed astonishing details about the managerial behavior of Sam Bankman-Fried and his close associates. Use of chat applications to validate transactions, transfer of large sums into the personal accounts of the founder and his advisers or even the purchase, with company funds, of private goods… The list is long!