“Digital Currency”

Fallen crypto billionaire Sam Bankman-Fried is being held in a Bahamian jail known to be overrun with rats and maggots — one so bad a warden has called it “not fit for humanity.”

The accused fraudster, once estimated to be worth $32 billion, is being held in the island’s only correctional facility, Fox Hill Prison, until at least Feb. 8 after failing to get bail while fighting against extradition to the US.

The jail was the focus of a damning report last year by the US Department of State into possible human rights violations, including violence and abuse by staff.

Mini-Madoff is in for some serious culture shock.

The spectacular rise and fall of Sam Bankman-Fried, the founder of the failed crypto exchange FTX, came full circle on Monday, with his arrest in the Bahamas at the request of U.S. authorities, followed by the S.E.C. filing its own charges on Tuesday.

The Times reports that federal prosecutors in Manhattan, who are seeking his extradition, will charge Mr. Bankman-Fried with wire fraud, wire fraud conspiracy, securities fraud, securities fraud conspiracy and money laundering. A trial could start late next year.

“Sam Bankman-Fried built a house of cards on a foundation of deception while telling investors that it was one of the safest buildings in crypto,” Gary Gensler, the S.E.C.’s chair, said in a statement. His agency has charged S.B.F., as the entrepreneur is known, with defrauding investors in FTX out of $1.8 billion, including $1.1 billion from U.S. entities. A big part of the fraud, it alleges, was keeping backers in the dark about “the undisclosed diversion of FTX customers’ funds” to the exchange’s trading affiliate, Alameda Research.

Teeters? More like fell down, burned up and sank into the swamp. But being a well connected Dem the swamp may be his salvation.

Yesterday, Sam Bankman-Fried (known as SBF), the former CEO of the collapsed cryptocurrency giant FTX, was arrested in the Bahamas and is being held in Bahamian jail pending his extradition to the United States. In an indictment unsealed this morning, SBF was charged with mail and wire fraud, money laundering, and other crimes related to a scheme measured in the billions of dollars.

If convicted on all charges, he faces a sentence along the same lines as the 150 years imposed on the notorious Ponzi schemer Bernie Madoff.

For weeks, the Justice Department did not have SBF arrested in the Bahamas, despite widespread public clamor for him to be immediately jailed. There are three reasons why the DOJ waited.

This is the best explanation I have found of the charges and potential consequences the entitled little crook is facing.

Sam Bankman-Fried claims he’s victim of anti-Semitism and that his failed crypto exchange is SOLVENT and can cover $1.8B losses

Bankman-Fried was due to give testimony today about his doomed platform before the U.S. House of Representatives Committee on Financial Services.

Forbes obtained a written copy of the testimony he was expected to give.

It began: ‘I would like to start by formally stating under oath: I f****d up. I know that it doesn’t mean much to say that I’m sorry. And so I’m dedicating as much of myself as I can to do the right thing by customers.

‘When all is said and done, I’ll judge myself primarily by one metric: whether I have eventually been able to make customers whole. If I fail our customers in this regard, I have failed myself.’

But over the next 18 pages, he blamed anti-Semitism, lawyers and even his own ex-girlfriend for the breakdown of his company. 

They were one part of a “Chinese harem polyamory” group set up in the Bahamas that mixed sex, pills and crypto. Now Sam Bankman-Fried and Caroline Ellison, the two executives at the center of the collapse of cryptocurrency firm FTX, appear to be turning on each other.

After Bankman-Fried suggested she might be to blame for a missing $8 billion in customer money, Ellison could be signaling she’s willing to flip on her old boyfriend with the hiring of the law firm Wilmer Hale.

Top white-collar attorneys point out that Wilmer Hale is among the most politically connected white-collar law firms in the country. It has a reputation for cutting deals with the Manhattan US Attorney’s office, itself the country’s premier prosecutor of business-related crimes.

She’s rollin.

Joseph Bankman and Barbara Fried, both professors at Stanford Law, have remained in the Bahamas with their son since his firm’s collapse

Sam Bankman-Fried, founder of the collapsed exchange FTX, always stood apart from other cryptocurrency entrepreneurs, and it wasn’t for his baggy shorts or taste in videogames.

Both his parents, as Mr. Bankman-Fried would note in meetings with Washington policy makers, are professors at Stanford Law School. Their reputations were a credential to their son as he grew his crypto empire, even to those inclined to see little value in the industry.

Well connected criminals.

Disgraced crypto king Sam Bankman-Fried was arrested by authorities in the Bahamas Monday night after criminal charges were filed in the US.

The 30-year-old was taken into custody after the Bahamian government received formal notification from the US of the charges against him, the Office of Attorney General in the Bahamas said.

Damian Williams, the U.S. Attorney for the Southern District of New York, confirmed Bankman-Fried’s arrest, but would not elaborate on what the charges were.

Did Ellison roll over?

US prosecutors are reportedly assembling a potential fraud indictment against disgraced crypto mogul Sam Bankman-Fried — and speculation is growing that his ex-girlfriend Caroline Ellison could become a stool pigeon in the case.

Justice Department officials in the Southern District of New York are reportedly scrutinizing the alleged transfer of hundreds of millions of dollars from the US to the Bahamas right around the time that his FTX cryptocurrency exchange filed for Chapter 11 bankruptcy protection, according to Bloomberg News.

Federal prosecutors in Manhattan also are probing whether Bankman-Fried manipulated crypto markets by orchestrating trades that led to the collapse of the TerraUSD cryptocurrency earlier this year, according to previous reports.

At an exclusive party in the Bahamas last spring, FTX founder Sam Bankman-Fried was perched atop a patio railing, mingling with pop star Katy Perry and actor Orlando Bloom. FTX was one of the hottest cryptocurrency exchanges of the moment, and Bankman-Fried was surrounded by people vying for attention.

Across the patio, keeping to herself, was one of Bankman-Fried’s key lieutenants, Caroline Ellison, who ran the crypto trading firm he founded, Alameda Research. She didn’t appear fazed by the celebrities, and party-goer David Micley found it easy enough to strike up a conversation with her.

“She didn’t seem like a person that took herself too seriously or thought of herself as too important,” said Micley, who works in the crypto industry and described the party scene to the Globe.

She may be playing this smarter than Sammy.

Evan Luthra says he lost more than $2 million when the FTX cryptocurrency exchange imploded last month. And he feels doubly injured seeing disgraced founder and CEO Sam Bankman-Fried making the media rounds, stating that he had no idea about the “huge management failures” and “accounting f–k-ups” that led to the collapse.

That Bankman-Fried has been holding court from what appears to be a stately home in the Bahamas, where he resides untouched by American law enforcement, is like salt on the wound.

After a week in which Sam Bankman-Fried was gabbing to just about anyone who would listen — repeating his questionable theory as to how his $32 billion crypto exchange’s collapse was a fraud-free mistake — what people were talking about this past weekend was what wasn’t said by his former top lieutenant and ex-girlfriend, Caroline Ellison. On Sunday afternoon, Autism Capital — an anonymous Twitter account that has been a go-to source for rumors (some true, some not so much) about everything related to Bankman-Fried — posted two pictures that appeared to show Ellison at a coffee shop in Manhattan.

Ha!

Usually when a person defrauds investors of millions of dollars and launders the funds to personal pet projects, he goes to jail. (See: Bernie Madoff.) But in FTX founder Sam Bankman-Fried’s case, you get kid gloves.

It was obvious corporate media decided to treat SBF differently from the start. When FTX first crumbled, the New York Times characterized SBF’s fall from grace as pure mismanagement. SBF was described as a “charitable entrepreneur,” while the words “fraud,” “crime,” or “stolen,” do not appear anywhere in the article.

On December 11, 2008, Bernie Madoff was arrested and criminally charged with one of the biggest financial frauds in history — an audacious, long-running Ponzi scheme that resulted in tens of billions of dollars in lost investor funds. At the time, the scandal sparked a national conversation about the gross deficiencies of our country’s white-collar enforcement regime, but ever since the initial revelations about the problems at FTX and about Sam Bankman-Fried’s criminal exposure, the Madoff case has resurfaced as a point of comparison for Bankman-Fried’s alleged misdeeds — and as a rallying cry for people who believe he should already have been locked up by U.S. prosecutors.

Bankman-Fried was asked about the comparison by Good Morning America anchor George Stephanopoulos and (of course) rejected it, arguing that FTX was a “real business” in contrast to Madoff’s outright Ponzi scheme.