SBF Arrested In The Bahamas

Yesterday was quite the day for the SBF / FTX saga as two important events occurred.

First, the disgraced exchange criminal was finally arrested in the Bahamas on a laundry list of charges.

Then, Congress held a four-hour-long hearing with FTX’s new CEO: John Jay Ray III.

The Arrest

The arrest came after the U.S. attorney’s office for the Southern District of New York formally charged SBF with eight counts of fraud and conspiracy.Furthermore, the SEC and the CFTC sued Mr. Bankman-Fried for fraud.

• The SDNY Indictment

• The SEC’s lawsuit

• The CFTC Lawsuit

To put it simply, the man is in a lot of trouble. Having to face simultaneous charges from the SDNY, the SEC, and the CFTC is pretty low on anybody’s bucket list.

If the government fully pursues the wire fraud charges, SBF may never see the light of day again.

It’s a severe punishment, but not one without precedent. Bernie Madoff, who many compare SBF to, received 150 years for his Ponzi scheme. Ouch.

We don’t think SBF’s media apology tour will help him get out of this one. 

John Ray Hearing

Separately, new FTX CEO John J. Ray III testified in front of Congress on Tuesday, and let’s just say it doesn’t sound good for FTX creditors.

Ray painted a picture of incompetence that boggles the mind. Invoices and expenses over Slack and QuickBooks for accounting. YOLO’d customer funds. Horrible venture investments. Insider loans.

All at a company that at its peak was worth $32 billion…

This is all to say that the FTX bankruptcy proceedings will take a long time. For context, the infamous exchange Mt. Gox went bankrupt in 2014, and creditors still haven’t been reimbursed.