SBF Is Now Inmate #14372
The Scoop is that feeling you get when you realize Sam Bankman-Fried was supposed to be speaking in front of the House of Representatives in Washington on Tuesday, but he instead got arrested by Bahamian Authorities on Monday night…causing you to wonder….
Is this guy going to get the book thrown at him?
The Big Scoop
Sam Bankman-Fried is sitting in a holding cell somewhere in The Bahamas?!?
As you can see, The Big Scoop was supposed to be that he finally agreed to speak before the House of Representatives in D.C. on Tuesday, but clearly, that’s not going to happen anymore. Instead, interim CEO John C. Ray III spoke.
He’s the guy that handled the Enron bankruptcy in 2001 (He says FTX is a way bigger mess and he mentioned the multi-billion dollar company is using Quickbooks to manage accounts, something he’s never seen for such a big company.
Ray has been appointed to represent the company post-bankruptcy. He’s not responsible for any of the shady stuff.
Now back to SBF…
According to a news article posted on CNBC, the U. S. Attorney for the Southern District of New York shared a sealed indictment with the Bahamian government. SBF’s arrest is the first firm action taken against anybody associated with the multibillion-dollar collapse of FTX.
It’s expected he’ll get extradited to the United States (which is how it should be).
Some of the charges SBF will face include wire fraud, wire fraud conspiracy, securities fraud, securities fraud conspiracy, and money laundering. That’s all according to the New York Times.
Looks like any future puff pieces are going to be put on hold for you Sammy boy!
PS. SBF is now inmate # 14372 as mentioned by a House Representative in Tuesday’s hearing.
THIS HAS GOTTA BE THE BIGGEST SCOOP OF THE YEAR, RIGHT?!
Let’s dive deeper into this juicy story, shall we?
SBF Arrested By Bahamian Authorities on Monday
Sam Bankman-Fried’s story has seemingly come to an end.
FTX’s former CEO was arrested in the Bahamas on Monday ahead of the Congressional hearing into the collapse of the exchange.
SBF naturally could no longer speak at the hearing as the U.S. government moved from requests and negotiations to criminal charges and extradition arrangements. FTX Interim CEO John J. Ray III took his place at the hearing.
SBF’s arrest marks the first move regulators have taken to make individuals accountable for the multibillion-dollar collapse of FTX.
Charges against SBF include wire fraud, wire fraud conspiracy, securities fraud, securities fraud conspiracy, and money laundering.
The Securities and Exchange Commission has also filed a civil complaint against Bankman-Fried, alleging that SBF engaged in a “scheme to defraud equity investors in FTX.”
The filing stated that since 2019 Bankman-Fried “raised more than $1.8 billion from equity investors, including approximately $1.1 billion from approximately 90 U.S.-based investors” and that “unbeknownst to those investors ... Bankman-Fried was orchestrating a massive, years-long fraud, diverting billions of dollars of the trading platform’s customer funds for his own personal benefit and to help grow his crypto empire.”
If the federal government pursues the wire or bank fraud charges, SBG could face life in prison without the possibility of supervised release.
Though we have likely not seen the full effect of FTX’s collapse, it appears that SBF’s story is over.. for now.
FTX Interim CEO John J. Ray III Speaks Before House of Representatives Without SBF on Tuesday
SBF was scheduled to speak at a Congressional hearing this week, looking into the collapse of the FTX exchange. However, before the hearing, the former CEO was arrested for his involvement in the crash, so FTX Interim CEO John J. Ray III took his place.
During the Congressional hearing on the FTX crisis, John J. Ray III made some very interesting comments stating that the exchange was using Quickbooks. Much smaller companies typically use Quickbooks, so it is peculiar for a multi-billion dollar company to use it.
John Ray also said that he doesn't think it's plausible that SBF's illegal activity within the company was by mistake.
Here are some other interesting points made during the hearing by John Ray:
Irregularities in recordkeeping at FTX–there was absolutely no recordkeeping at FTX.
No distinction between FTX and Alameda Research regarding governance.
FTX is conducting bankruptcy operations in paperless mode.
FTX had lost over $7 billion in value.
The Congress representatives at the hearing also stated that SBF wanted to keep the US Securities and Exchanges Commission away from the crypto industry. During the hearing,
Congress Representative Brad Sherman said, "Now Sam Bankman-Fried, or should I say inmate 14372, had one purpose in all of his efforts here in Congress. He's a well-known figure, only one wearing shorts. His one purpose was to keep the SEC out of crypto."
However, the crypto space appears to have reacted positively to the news of SBF's arrest. Within 24 hours of the announcement, Bitcoin's price rose by 5%, while Ethereum's increased by 6%.
As we approach year-end, here is a quick snapshot of how the crypto market is doing!
Fundraising In Web3.
Here’s a rundown of how the chatter is being distributed 🧀🐁🤑💸💰:
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The Final Scoop
With every day that passes, we will get another step closer to clarity regarding the crypto contagion that is grabbing hold of Web3 to close out 2022. As long as you have been acting as the sole gatekeeper of your data and money, you’ll be fine. You’re getting through the worst of it.
Make the holiday season a time to reflect on what’s happening and how much you’ve learned about Web3.
Also, keep an eye on all the positive things that are going on.
Some of the best companies and innovations in human history have been launched during the worst of times, and NFT projects, DeFi protocols, and metaverse platforms will be no exception this time around.
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