US lawmakers slam timing of arrest of FTX boss Sam Bankman-Fried

Republican says House GOP ‘was ready to grill him six ways to Sunday’

Gustaf Kilander
Washington, DC
Tuesday 13 December 2022 18:15 GMT
Related video: A gift from the FTX fallout

US lawmakers from both parties have slammed the timing of the arrest of FTX boss Sam Bankman-Fried, who was set to testify before Congress.

The 30-year-old was arrested in The Bahamas on Monday night after criminal charges were filed against him.

The US Securities and Exchange Commission has charged the cryptocurrency exchange boss with defrauding investors.

SEC Chair Gary Gensler in a statement that “we allege that 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”.

The charges – wire fraud, money laundering, and conspiracy to defraud the United States through violating campaign finance laws – were revealed on Tuesday morning.

The former billionaire was set to testify on Tuesday at the House Financial Services Committee before he was arrested.

New York Republican Representative and former GOP gubernatorial nominee Lee Zeldin tweeted on Monday evening that the House GOP “was ready to grill him six ways to Sunday. Now breaking tonight, SBF was just arrested! Why not allow him to first testify tomorrow and answer our many questions?”

The chair of the Financial Services Committee, California Democrat Maxine Waters said in a statement that “although Mr Bankman-Fried must be held accountable, the American public deserves to hear directly from Mr Bankman-Fried about the actions that’ve harmed over one million people, and wiped out the hard-earned life savings of so many”.

“While I am disappointed that we will not be able to hear from Mr Bankman-Fried... we remain committed to getting to the bottom of what happened,” she added.

“The public has been waiting eagerly to get these answers under oath before Congress, and the timing of this arrest denies the public this opportunity,” she said.

The timing of the arrest was also criticized by Abraham Hamadeh, a former prosecutor and GOP nominee for Arizona Attorney General.

“As a former prosecutor, this doesn’t make much sense. You want him to talk…,” he tweeted.

Mr Bankman-Fried has been investigated by the Department of Justice since 11 November, when FTX filed for bankruptcy after traders attempted to withdraw $6bn from FTX in the span of three days, according to the New York Post.

Mr Bankman-Fried resigned as FTX CEO on the same day as the platform filed for bankruptcy and was planning on blasting his former attorneys and the new FTX CEO John Ray during the hearing, a draft copy of his testimony obtained by Reuters revealed. He was set to argue that he was under pressure from his lawyers to nominate Mr Ray as the CEO following the massive loss of funds from users.

After receiving a new funding offer, he changed tack but was told it was too late to remove Mr Ray from the role.

He has rejected personal responsibility for the collapse of FTX and has said that he “didn’t ever try to commit fraud”.

In his testimony, he was set to say that “I would like to start by formally stating, under oath: I f***ed up”.

Join our commenting forum

Join thought-provoking conversations, follow other Independent readers and see their replies


Thank you for registering

Please refresh the page or navigate to another page on the site to be automatically logged inPlease refresh your browser to be logged in