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SBF Arrested by Bahamian Authorities. But What Happens Now?

Funnily enough, just recently, Sam Bankman Fried (SBF) stated during an appearance on a Twitter space by @unusual_whales, “I don’t think I will be arrested.”

Here are some potential scenarios that can play out from here.

Before I get into this, it’s important to understand that SBF has only been arrested and not convicted. However, the charges against SBF include wire fraud, securities fraud, and money laundering.

So, let’s get into it.

  1. SBF will no longer be testifying in front of the House Financial Services Committee 

In the same twitter space talk mentioned above, SBF confirmed that he is expecting to testify (remotely) before the House Committee on Financial Services in a hearing investigating the collapse of the exchange.

While this testimony will no longer take place due to obvious reasons, an article by Forbes claimed to have obtained a draft of Bankman-Fried’s testimony and is publishing it here

https://www.forbes.com/sites/stevenehrlich/2022/12/13/exclusive-transcript-the-full-testimony-sbf-planned-to-give-to-congress/?sh=fe373e93c474

Bankman-Fried’s arrest was confirmed by Damian Williams in a tweet. According to him, the indictment will be made public in the morning by the US. Williams added that they will have more to say then.

The Bahamas will swiftly handle any formal extradition request from the US in accordance with its legal and contractual obligations.

*Update for 22nd December, Sam Bankman-Fried has been extradited to the US and been granted bail for $250 million. However, he is under house arrest and has his passport surrendered.

  • Potential Prison Sentence? Lift in Prison?

The former CEO of FTX could be sentenced to life in prison without the chance of supervised release, according to legal experts. Since authorities have previously handed down a number of unusual sentences, a harsh punishment would not really be shocking. For example, Bernie Madoff received a 150-year prison term for operating one of the biggest, longest, and most pervasive Ponzi schemes in recorded history. I personally don’t see why this should be seen as any different.

Overall, I think that the situation with SBF, FTX and Alameda Research is only the tip of the iceberg. The potential upcoming court case on this is definitely going to start uncovering many gaps in the story as we are yet to hear from people like Caroline (CEO of Alameda Research) for example. While this may be a continued bumpy road for the cryptocurrency industry, the arrest of SBF is definitely a step in the right direction.

*Update for December 22nd, Caroline Ellison (CEO of Alameda Research) has been charged with Criminal Fraud Charges and has since pleaded guilty to these charges and is cooperating with authorities.

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