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Sam Bankman-Fried has been arrested in the Bahamas and could be extradited to the US Alameda CEO Caroline Ellison reportedly spotted in New York Former CEO Sam Trabucco resigned in August and largely avoided the same levels of scrutiny as the another two Oh, Sam. The hapless founder of FTX, Sam Bankman-Fried, was arrested Monday by the Bahamian Police Force after the US filed criminal charges against him. The Bahamas have stated that they expect the US to also request extradition soon. “As a result of the notification received and the material provided with it, it was deemed appropriate for the Attorney General to request the arrest of SBF and to place him in custody in accordance with our country’s Extradition Law,” said the statement, attributed to the prosecutor. -General Ryan Pinder. The charges against Bankman-Fried allegedly include wire fraud, wire fraud conspiracy, securities fraud, securities fraud conspiracy and money laundering. The charges could land Bankman-Fried decades in prison. Oops!
What is going to happen?
This is an amusing selection of accusations revealing that Bankman-Fried really did all of this. He was due to testify before the House Financial Services Committee at 10 am EST today upon hearing of the FTX crash. That is no longer the case, instead Bankman-Fried will appear before the Magistrates Court in Nassau, Bahamas. Once Bankman-Fried is back on American soil, a trial won’t happen anytime soon. This is a crime of historic scale in numerous jurisdictions, and the case will take a long time. The SEC also made separate allegations that Bankman-Freid defrauded investors. “We allege that Sam Bankman-Fried built a house of cards based on deception while telling investors it was one of the safest buildings in crypto,” said SEC Chairman Gary Gensler. “The alleged fraud committed by Mr. Bankman-Fried is a wake-up call to crypto platforms that they need to comply with our laws.”
What will happen to Caroline Ellison?
Obviously this will also happen to Alameda CEO Caroline Ellison. Alameda is the trading company also founded by Bankman-Fried, and where funds from FTX clients were sent to offset large trading losses. Ellison is believed to have been in Hong Kong at the time of the arrest, but she may have been seen in a Manhattan cafe, meaning she is already on US soil.
PLEASE CONFIRM: A user claims that they spotted Caroline Ellison at Ground Support Coffee on West Broad in SoHo Manhattan at 8:15 AM. This would mean she is not in Hong Kong and is in NY not in custody. pic.twitter.com/QUduYO9GfZ
— Autism Capital 🧩 (@AutismCapital) December 4, 2022
This sparked speculation that a plea deal may have been reached, although this is all speculation. Bankman-Fried has repeatedly denied that he fully supervised all operations, contesting that he “wasn’t running Alameda” and “didn’t know the size of his position.” This suggests that Bankman-Fried is throwing Ellison, his ex-girlfriend, at the stake. Ellison hasn’t tweeted since Nov. 9, with radio silence since the bankruptcy. She had previously tweeted on Nov. 6 to Binance CEO Zhao trying to buy the collapsing FTT tokens — FTX’s low-liquidity native token that artificially underpinned the entire ecosystem — from Zhao for $22 per share (Zhao himself is also facing criminal charges related to a separate case). Time will tell what happened to Ellison, but it seems almost impossible to believe that both Bankman-Fried and Ellison were unaware of what was happening at both companies, given the size of the damage – $8 billion. That and the fact that, you know, they were both CEOs of their respective entities.
And Sam Trabucco?
Then there is the case of Sam Trabucco. Trabucco is the former co-CEO of Alameda, alongside Ellison. Timing of it was, how should I say it, interesting. He announced his retirement less than three months before the house of cards collapsed, when Ellison became sole CEO. In an infamous Twitter thread, he cited increased work hours and a shift in priorities to step down. “I’ve reached a point in my life where I want other things. What other things? Not sure exactly. I’ve been really happy lately, spending a lot of time travelling, visiting friends and family, working on ‘myself’ amongst other things. I also bought a boat, which was nice.” I don’t know why Trabucco isn’t facing scrutiny. LUNA’s death spiral in May is supposedly what triggered many losses for Alameda that led to the FTX fund mix. Three months after that collapse, in August, Trabucco resigned. As CEO, he should have known what was going on, yet he is still evading scrutiny. He too has been silent since the bankruptcy, his last tweet of Nov. 8 wishing the “road ahead to be brighter.”
Much love to everyone — I’m sure the past few days have been dark for many and I hope the road ahead is brighter. — Sam Trabucco (@AlamedaTrabucco) November 8, 2022
He is also revealed to have purchased two properties worth $8.7 million in cash last year. This is in addition to the aforementioned yacht purchase, for which he hired a freelancer on Fiverr to design the logo (he called it “Soak my Deck” apparently). So let’s not forget that he is a key figure in all of this.
final thoughts
There will likely be more plot twists, but now that one of the top three executives has been arrested, I’m curious to see what happens to the other two. The Bankman-Fried trial probably won’t start for quite some time, and the whole thing won’t be resolved for years. As for the other two, all bets are off, but I wouldn’t be surprised if they get a charge on their doorsteps anytime soon. A real mess and a sad story for the entire industry.
