Tuesday, September 26, 2023

Why Was Sam Bankman-Fried Arrested Before He Was Due to Testify on US Capitol Hill?

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Former FTX CEO Sam Bankman Fried, now facing a litany of criminal charges in the US, was expected to testify before US Congress on Tuesday, fielding questions from the House Financial Services Committee on the billions of dollars missing from his cryptocurrency platform. Instead, he stood in a Bahamas court under arrest and fighting extradition, as new CEO John Ray III showed up on Capitol Hill alone, revealing the spectacular underpinnings of FTX, the now troubled exchange.

The public anticipated Bankman-Fried’s appearance, whether in-person or virtually, since Chairwoman Maxine Waters posted the request to Twitter, appealing for the former billionaire to account for the missing massive cash which belonged to his customers and investors.

The arrest of Bankman-Fried was rapid and shocking. The dramatic turn of events now meant US lawmakers will no longer grill him on Capitol Hill.

Congressman William Timmons (Republican-South Carolina), also a former prosecutor, questioned the “bizarre” move by the prosecutors of the South District of New York.

Congressman William Timmons (Republican-South Carolina)

“Why 36 hours before testifying…did the South District New York send an arrest warrant to facilitate the arrest to preclude his [Sam Bankman-Field] testimony?” he asked.

Ray agreed that Bankman-Fried’s testimony to Congress would have “absolutely” been helpful to understanding the case.

John Ray III, the new CEO of FTX answers questions on Capitol Hill.

Bankman-Fried was arrested on Monday night in the Bahamas, by request from the US government, one day before the congressional hearing. US Prosecutor Damian Williams threw eight charges of conspiracy, fraud, money laundering, and campaign violation at the 30-year-old crypto darling.

“I believe it was a decision made by the DOJ to prevent Sam Bankman-Fried from coming here to answer questions in front of people,” Timmons asserted.

His testimony “would be great for the case,” he continued. “I just don’t understand it.”

“I look forward to figuring out why they did that.”

Bankman-Fried was the second biggest donor to the Democratic party, even giving millions to President Joe Biden when he campaigned against Donald Trump. It is reported that he hoped to influence crypto regulations.

FTX, once valued at $32 billion imploded in a matter of weeks after documents were leaked that Bankman-Fried was funneling cash to his sister company Alameda Research, and the exchange had a gap of $8 billion in losses.

Bankman-Fried quickly filed for bankruptcy on November 11 and the man who was once lauded for his billion-dollar crypto successes became the villain of the financial market with only a meager $100,000 reportedly left in his bank account.

Photo credit: Keith Gomez

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