SAM BANKMAN-FRIED'S ARREST CONT’D

So we’re following up a bit on what we discussed yesterday about Sam Bankman Fried’s (SBF) arrest in the Bahamas. We knew that he was going to be charged with multiple counts of fraud according to the New York Times but now we have more details.

SBF has been accused of orchestrating a scheme to defraud his investors. Apparently, he moved billions of dollars illegally from his company FTX to his other company Alameda. (There is a coin created by FTX (called FTT) that FTX customers could use to trade their crypto assets - Alameda was used as the FTT coin’s main buyer and seller.) 🤔😳

Prosecutors are calling it a dirty money scheme that helped SBF buy political influence and therefore impact the direction of public policy in Washington, according to CNBC. We said yesterday that today was the day that SBF was supposed to attend a hearing with the House Financial Services Committee but of course, he was taken into custody in the Bahamas yesterday.🤨 (The Financial Services committee still went ahead with the hearing of the FTX implosion today in Washington DC.)

Meanwhile a judge in the Bahamas denied bail to SBF on Tuesday. The Washington Post said, “After a contentious hearing that lasted much of the day, Chief Magistrate Joyann Ferguson-Pratt said Bankman-Fried should remain in jail without bail as he fights extradition to the United States. Bankman-Fried’s lawyer had argued that it is customary to grant bail to nonviolent offenders. But Bahamian prosecutors argued that Bankman-Fried is a flight risk who might still have significant amounts of money hidden in other countries.”

By all appearances, this seems to be the biggest financial fraud in American history. In a news conference today the Southern District of New York laid out a case against SBF and FTX and the Securities and Exchange Commission as well as the Commodity Futures Trading Commission filed complaints too.

This is a hot mess but we’ll leave it here for now, I’ll keep you updated as things progress. For the rest of this week, we’ll chat about stocks and the Stock Market. I’ll see you tomorrow!

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