A bipartisan duo of legislators Monday night questioned the appropriateness of detaining disgraced crypto king Sam Bankman-Fried the day before he was supposed to testify before Congress regarding the collapse of his FTX exchange.
The 30-year-old FTX founder was detained by authorities in The Bahamas Monday night after criminal charges were filed against him by US prosecutors.
But Bankman-Fried’s abrupt arrest means the shaggy-haired former billionaire will be excluded from appearing at Tuesday’s House Financial Services Committee.
Rep. Lee Zeldin (R-NY) was among those to question the timing of his detainment, writing that House Republicans had been “ready to interrogate him six ways to Sunday” on the failure of one of the world’s major bitcoin exchanges.
“Tomorrow, Sam Bankman-Fried was supposed to appear in front of the House Financial Services Committee … Now breaking tonight, SBF was just arrested!” Zeldin wrote.
Sam Bankman-Fried testifies during the House Financial Services Committee hearing on Dec. 8, 2021.
“Why not allow him to 1st testify tomorrow and address our many questions?”
Rep. Maxine Waters (D-Calif.), who is chairwoman of the financial services committee, reiterated her worries, saying she was “disappointed” the arrest transpired prior to Bankman-Fried’s testimony.
“Although Mr Bankman-Fried must be held accountable, the American public needs to hear directly from Mr Bankman-Fried about the activities that’ve injured over one million people, and wiped out the hard-earned life savings of so many,” Waters said in a statement.
“The public has been waiting impatiently to obtain these answers under oath before Congress, and the timing of this arrest denies the public this opportunity.”
But politicians weren’t the only ones quizzing the decision.
Bankman-Fried has been under investigation ever since FTX collapsed and filed for bankruptcy protection on Nov. 11.
Abe Hamadeh, a former prosecutor and Arizona attorney general nominee for the Republican Party, stated that the decision to arrest Bankman-Fried on the eve of his testimony was not tactically sound.
As a former prosecutor, this makes little sense to me. “You want him to speak,” tweeted Hamadeh.
Others appeared to indicate that Bankman-Fried was spared due to his history of donating millions of dollars to Democratic political campaigns and predominantly left-leaning groups.
Javon A. Price of the America First Policy Institute tweeted, “We ALL know the actual reason mega-Democrat contributor Sam Bankman-Fried was arrested today…so he wouldn’t have to testify in front of Republicans on the House Financial Services Committee tomorrow.”
Since FTX crumbled and filed for bankruptcy protection on November 11 after traders rushed to take $6 billion from the platform in just three days, Bankman-Fried has been under investigation by the Department of Justice.
During the Congressional hearing, the former millionaire, who resigned as FTX’s CEO on the day of the bankruptcy filing, intended to attack his former attorneys, Sullivan and Cromwell, and the new FTX CEO, John Ray.
According to a draft of his statement seen by Reuters, Bankman-Fried had intended to state that he was forced by the attorneys to propose Ray as CEO following the unexpected outflow of customer assets.
After receiving an offer of billions of dollars in additional cash, he changed his mind 10 minutes later, but claims he was informed it was too late to remove Ray.
Bankman-Fried has consistently denied personal culpability for the collapse of the platform and distanced himself from fraud allegations, claiming he “never attempted fraud.”
In his testimony, he intended to reiterate his assertions, stating, “I would like to begin by formally declaring under oath: I f–ked up.”
Tuesday, US Attorney for the Southern District of New York Damian Williams will unseal the indictment against Bankman-Fried.
The allegations include wire fraud, wire fraud conspiracy, securities fraud, securities fraud conspiracy, and money laundering, according to a source cited by the New York Times.
Reports indicate that federal authorities have been investigating how FTX handled customer funds and the alleged transfer of hundreds of millions of dollars from the United States to the Bahamas around the time the bankruptcy declaration was made.
In addition, they are also investigating whether Bankman-Fried manipulated cryptocurrency markets by coordinating trades that contributed to the collapse of the TerraUSD coin earlier this year.
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