The Federal Bureau of Investigation (FBI) intends to extradite former FTX CEO Sam Bankman-Fried (SBF) to the United States for questioning and is in talks with Bahamian authorities about it.
FBI talking to Bahamian authorities
According to reports from Bloomberg News which cites several people familiar with the matter, there’s been a marked escalation in conversations between Bahamian law enforcement and the FBI as investigations into Mr. Bankman-Fried’s role in the collapse of FTX continues.
SBF, his co-founder Gary Wang, and FTX director of engineering Nishad Singh have been reported to be in The Bahamas, where they’re said to be under supervision by local authorities.
The former FTX CEO has reportedly been cooperating with the Bahamas Securities Commission (BSC), which earlier last week joined five other regulatory bodies from around the world in launching investigations into the circumstances surrounding FTX’s collapse. These regulators include the US Securities and Exchange Commission (SEC), the Commodity Futures Trading Commission (CFTC), and Japan’s Financial Services Agency, which are all trying to determine if there had been criminal misconduct behind the crypto exchange’s implosion.
Bahamian authorities seize FTX properties
The news of SBF’s possible extradition comes only hours after Bahamian authorities allegedly seized the company’s headquarters to preserve any assets that may be used to make FTX investors whole in the future.
The crypto exchange only recently filed for chapter 11 bankruptcy alongside 130 other entities linked to it, including Alameda Research.
There’ve also been rumours that SBF had attempted to flee to the United Arab Emirates (UAE). However, the Middle Eastern kingdom wouldn’t have offered him much refuge as it has an ongoing agreement with the United States to turn in American fugitives.
Was “crypto whiz” actually crypto fraud?
In the days leading to FTX’s fall, Bankman-Fried had promised customers in now-deleted tweets that user assets on the platform were fine. He also claimed FTX remained ready to handle all client withdrawals.
However, reports of questionable business practices at FTX seem to have been validated in the wake of the company’s collapse. For instance, according to Reuters, SBF secretly used $10 billion in client assets to bolster his struggling trading company Alameda Research. Notably, at least $1 billion of those deposits are missing.
Additionally, rumours claim that SBF had a backdoor into FTX’s accounting software that allowed him to do transactions covertly. As a result, it gave the staff the impression that the books were okay.
SEC chair caught in FTX inferno
While some think SBF will face little to no consequences for his conduct, more than 4,000 people have signed a petition requesting the US Congress to formally investigate SEC chair Gary Gensler’s actions in the FTX fraud.
Tom Emmer, the Republican lawmaker from Minnesota’s 6th congressional district, accused Gensler of assisting SBF to gain a “regulatory monopoly” using the now bankrupt crypto exchange.
In a November 10 tweet, Emmer claimed to have received reports that the SEC chair was helping Bankman-Fried and FTX to take advantage of legal loopholes that would allow the crypto exchange to obtain a legal monopoly.
While Emmer didn’t elaborate on the nature of Gensler’s alleged help, media reports point to a 45-minute Zoom meeting on March 23 between the SEC’s senior counsel Amanda Fischer and senior adviser Corey Frayer, as well as representatives from the IEX stock exchange and FTX, including SBF himself. Later, FTX invested in the IEX exchange.