US Reps question timing of FTX founder Sam Bankman-Fried’s arrest

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US Reps question timing of FTX founder Sam Bankman-Fried's arrest

A bipartisan duo of lawmakers Monday night questioned the wisdom of arresting disgraced crypto king Sam Bankman-Fried the day before he was set to testify before Congress about the collapse of his FTX exchange.

The 30-year-old FTX founder was nabbed by authorities in The Bahamas Monday night after criminal charges were filed against him by US prosecutors.

But Bankman-Fried’s sudden arrest means the shaggy-haired former billionaire will be exempt from testifying at Tuesday’s House Financial Services Committee.

Rep. Lee Zeldin (R-NY) was among those to criticize the timing of his detainment, tweeting that House Republicans had been “ready to grill him six ways to Sunday” on the failure of one of the world’s largest cryptocurrency exchanges.

“Tomorrow, Sam Bankman-Fried was scheduled to testify in front of the House Financial Services Committee … Now breaking tonight, SBF was just arrested!” Zeldin wrote.

Sam Bankman-Fried testifies during the House Financial Services Committee hearing on Dec. 8, 2021.
Sam Bankman-Fried testifies during the House Financial Services Committee hearing on Dec. 8, 2021.
CQ-Roll Call, Inc via Getty Images

“Why not allow him to 1st testify tomorrow and answer our many questions?”

Rep. Maxine Waters (D-Calif.), who is chairwoman of the financial services committee, echoed those concerns, saying she was “disappointed” the arrest happened prior to Bankman-Fried’s testimony.

“Although Mr Bankman-Fried must be held accountable, the American public deserves to hear directly from Mr Bankman-Fried about the actions that’ve harmed over one million people, and wiped out the hard-earned life savings of so many,” Waters said in a statement.

“The public has been waiting eagerly to get these answers under oath before Congress, and the timing of this arrest denies the public this opportunity.”

But lawmakers weren’t the only ones quizzing the decision.

Bankman-Fried had been under investigation ever since FTX collapsed and filed for bankruptcy protection on Nov. 11.
Bankman-Fried had been under investigation ever since FTX collapsed and filed for bankruptcy protection on Nov. 11.
AFP via Getty Images

Abe Hamadeh, a former prosecutor and GOP nominee for Arizona attorney general, said the decision to arrest Bankman-Fried on the eve of his testimony didn’t make sense tactically.

“As a former prosecutor this doesn’t make much sense. You want him to talk…,” Hamadeh tweeted.

Others appeared to suggest Bankman-Fried had allegedly been spared because of his history in donating millions of dollars to Democrat political campaigns and mostly left-leaning political causes.

“We ALL know the real reason why mega-Democrat donor Sam Bankman-Fried was arrested today…so he wouldn’t have to testify in front of Republicans on the House Financial Services Committee tomorrow,” Javon A. Price, of the America First Policy Institute, tweeted.

Bankman-Fried had been under investigation by the Justice Department ever since FTX imploded and filed for bankruptcy protection on Nov. 11 after traders rushed to withdraw $6 billion from the platform in just three days.

A photo of the luxury Albany Bahamas — where Bankman-Fried was staying — is shown.
A photo of the luxury Albany Bahamas — where Bankman-Fried was staying — is shown.
Albany Bahamas

The former billionaire, who resigned as FTX’s CEO the day of the bankruptcy filing, was planning to lash out at his former lawyers — Sullivan and Cromwell — and new FTX CEO John Ray during the Congressional hearing.

According to a draft copy of his testimony obtained by Reuters, Bankman-Fried had planned to say he was pressured by the lawyers to nominate Ray as CEO in the wake of the sudden exodus of customer funds.

He changed his mind 10 minutes later after receiving an offer of billions of dollars of fresh funding but claims he was told it was too late to remove Ray.

Bankman-Fried has repeatedly denied personal responsibility for the platform’s collapse and distanced himself from fraud accusations, insisting he “didn’t ever try to commit fraud.”

He was planning to repeat those claims in his testimony, saying: “I would like to start by formally stating, under oath: I f–ked up.”

Damian Williams, the US Attorney for the Southern District of New York, said the indictment against Bankman-Fried would be unsealed Tuesday.

The charges include wire fraud, wire fraud conspiracy, securities fraud, securities fraud conspiracy and money laundering, the New York Times reported, citing a person with knowledge of the matter.

Federal prosecutors have reportedly been scrutinizing how FTX handled customer funds and the alleged transfer of hundreds of millions of dollars from the US to the Bahamas around the time of the bankruptcy filing.

They were also said to be probing whether Bankman-Fried manipulated crypto markets by orchestrating trades that led to the collapse of the TerraUSD cryptocurrency earlier this year.

With Post wires

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