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Key Takeaways

• Sam Bankman-Fried has been arrested within the Bahamas and faces extradition to US
• Alameda CEO Caroline Ellison was reportedly noticed in New York
• Former CEO Sam Trabucco resigned in August and has largely averted the identical ranges of scrutiny as the opposite two

Oh, Sam.

Disgraced FTX founder Sam Bankman-Fried was arrested Monday by the Bahamas Police Force, after the US filed prison prices towards him. The Bahamas have said that it expects US additionally to request extradition imminently.

“As a result of the notification received and the material provided therewith, it was deemed appropriate for the Attorney General to seek SBF’s arrest and hold him in custody pursuant to our nation’s Extradition Act,” the assertion, attributed to Attorney General Ryan Pinder, mentioned.

Charges towards Bankman-Fried reportedly embrace wire fraud, wire fraud conspiracy, securities fraud, securities fraud conspiracy and cash laundering. The prices might land Bankman-Fried a long time in jail. Whoops.

What occurs subsequent?

That’s a cool choice of prices, revealing Bankman-Fried actually did do all of it.

He was meant to testify earlier than the House Financial Services Committee at 10AM EST as we speak on listening to about the FTX crash. That is now not the case, as an alternative, Bankman-Fried will seem in Magistrate Court in Nassau, Bahamas.

Once Bankman-Fried will get again on American soil, a trial gained’t occur anytime quickly. This is a criminal offense of historic scale throughout myriad jurisdictions, and the case will take lots of time.

The SEC additionally made separate prices that Bankman-Freid defrauded traders.

We allege that Sam Bankman-Fried constructed a home of playing cards on a basis of deception whereas telling traders that it was one of many most secure buildings in crypto,” mentioned SEC Chair Gary Gensler. “The alleged fraud committed by Mr. Bankman-Fried is a clarion call to crypto platforms that they need to come into compliance with our laws.”

What occurs Caroline Ellison?

The elephant within the room is what occurs to Alameda CEO Caroline Ellison. Alameda is the buying and selling agency additionally based by Bankman-Fried, and the place buyer funds on FTX had been despatched to as a way to shore up giant buying and selling losses.

Ellison was thought to have been in Hong Kong on the time of the arrest, however she could have been noticed at a café in Manhattan, that means she is already on US soil.

PLEASE CONFIRM: A consumer claims that they noticed Caroline Ellison at Ground Support Coffee on West Broad in SoHo Manhattan at 8:15 AM. This would imply she shouldn’t be in Hong Kong and is in NY not in custody. pic.twitter.com/QUduYO9GfZ

— Autism Capital 🧩 (@AutismCapital) December 4, 2022

This sparked hypothesis {that a} plea deal could have been reached, though that’s all hypothesis. 

Bankman-Fried has repeatedly denied that he had full oversight over all operations, contesting that he “wasn’t running Alameda” and “he didn’t know the size of their position”. 

This means that Bankman-Fried is throwing Ellison, his former girlfriend, underneath the bus. Ellison has not tweeted since November 9^th, with radio silence because the chapter.

She had beforehand tweeted on November 6^th to Binance CEO Zhao, making an attempt to purchase the collapsing FTT tokens – the low liquidity native token of the FTX change that was artificially propping up the entire ecosystem – from Zhao at $22 per share (Zhao himself can also be facing criminal charges regarding a separate case).

Time will inform what occurs to Ellison, nevertheless it appears virtually unimaginable to imagine that each Bankman-Fried and Ellison weren’t conscious of what was taking place at each their firms, given the dimensions of the injury – $8 billion. That and the truth that that, you recognize, they had been each CEOs of the respective entities.

What about Sam Trabucco?

Then there’s the case of Sam Trabucco.

Trabucco is the previous co-CEO of Alameda, alongside Ellison. His timing was, how ought to I say this, attention-grabbing. He introduced his retirement lower than three months earlier than the home of playing cards collapsed, when Ellison grew to become the only real CEO.

In an notorious tweet thread, he cited rising work hours and a change of priorities for stepping down.

“I’ve reached a point in my life where I want other things. What other things? I’m not really sure, exactly. Lately I’ve been really happy, spending a lot of time travelling, visiting friends and family, working on ‘myself’ and whatnot. Also I bought a boat, that’s been cool”.

I’m undecided why Trabucco shouldn’t be dealing with scrutiny. The LUNA dying spiral of May is supposedly what triggered lots of the losses for Alameda that led to the commingling of funds from FTX. It was three months after this collapse, in August, that Trabucco resigned. As CEO, he should have identified what was happening, but is basically escaping scrutiny.

He additionally has gone silent because the chapter, his remaining tweet from November 8^th wishing that the “road ahead is brighter”.

Much like to everybody — I’m positive the previous few days have been darkish for a lot of and I hope the highway forward is brighter.

— Sam Trabucco (@AlamedaTrabucco) November 8, 2022

He was additionally revealed to have bought two properties value $8.7 million in all money final 12 months. This is along with the yacht buy talked about above, which he reportedly employed a freelancer on Fiverr to design the brand for (he named it “Soak my Deck” apparently).  

So allow us to not overlook that he’s a key determine in all this.

Final ideas

There will possible be extra twists within the story, however now that one of many three prime execs are arrested, I’m curious to see what will occur the opposite two.

Bankman-Fried’s trial possible gained’t begin for fairly some time, and the entire thing gained’t be resolved for years. As for the opposite two, all bets are off, however I might be stunned in the event that they don’t obtain a knock on their doorways anytime quickly.

What an entire mess, and a tragic story for all the business.