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Sam Bankman-Fried Arrested in the Bahamas

Sam Bankman-Fried Arrested in the Bahamas
  • Federal prosecutors from the Southern District of New York, in addition to the Securities and Exchange Commission and Commodity Futures Trading Commission filing civil suits, revealed a history behind Sam Bankman-Fried’s crypto empire collapse. 

With his unexpected arrest on Monday night, Sam Bankman-Fried had made amends with everyone who would hear him out. In a confidential draft of the testimony he planned to deliver to the House, he expressed that for all his adult years, he was quite remorseful. He sincerely communicated and acknowledged that “he messed up” in multiple mediums, from tweets to written messages and verbal confessions alike.

Despite apologizing to Bahamas regulators for “ending up in this position”, it remained unclear what Bankman-Fried was sorry for, especially considering his adamant denials of fraud across various media outlets and on Twitter. As he was escorted out of his penthouse apartment in Nassau in handcuffs, the truth began to take shape.

On the day after his arrest, federal prosecutors and regulators released a flurry of documents that not only accused Bankman-Fried of committing fraud but stated with certainty that this deception started from the very beginning. The Securities Exchange Commission filing further substantiated these claims.

Far from making a “f—– up”, SEC and Commodity Futures Trading Commission regulators, alongside federal prosecutors from the United States Attorney’s Office for the Southern District of New York, assert that Bankman-Fried was an integral part – in fact driving force behind what has been described by U.S. Attorney Damian Williams as “one of the biggest financial frauds in American history.” The accusations against Bankman-Fried were formulated with remarkable swiftness but afford insight into one of the most eminent prosecutions since Enron’s downfall.

In November 2017, Bankman-Fried established his cryptocurrency hedge fund Alameda Research in Berkeley, California. The offspring of two Stanford law professors and a graduate from MIT, Bankman-Fried had previously worked at the top quantitative trading firm Jane Street Capital before collaborating with MIT classmate Gary Wang to venture into cryptocurrencies.

With its arbitrage approach, Alameda Research capitalized on the price discrepancies between South Korea and other markets to make a mint with what was nicknamed “the kimchi swap” buying Bitcoin at a low cost in one exchange while simultaneously selling it for inflated prices elsewhere. Bankman-Fried and Wang were prime beneficiaries of this lucrative strategy.

About the author

Ombir Sharma

Ombir is a SEO Executive at The Next Hint Media, Inc. He is a SEO and writer has 2 years of experience in these respective fields. He loves spending his time in doing research on different topics.

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