It should be noted that now Sam Bankman-Fried is trying to play the victim of circumstances and at the same time to shift part of the blame on representatives of Alameda Research – the trading company which he founded. However, the day before, the head of cryptocurrency exchange Coinbase, Brian Armstrong, recommended against believing Sam’s claims.

Brian is confident that it’s impossible not to see a hole in the balance sheet of several billion dollars. Which means Bankman-Fried’s current position is just a cover for a future court case.

Coinbase CEO Brian Armstrong

Why the FTX founder was not arrested

In the eyes of most, Bankman-Fried is responsible for the collapse of FTX. While it is true that he may have done many unethical and illegal things in running the company, government authorities do not yet have clear proof of his guilt. In an interview with Decrypt, the lawyers interviewed pointed out that there are several major investigations into Sam. And while the details of what happened are clarified, the former FTX executive is unlikely to go to jail.

Ex-CEO of FTX Sam Bankman-Fried

After Sam, John Ray III has become the new CEO of FTX: it is this lawyer who handles the bankruptcy cases of large corporations. He had previously argued that the management of the exchange by its senior management was grossly negligent, something Ray had not seen in all his years of legal practice. But the court still needs evidence before it can reach a verdict, which means that commentary alone is certainly not enough.

Besides, FTX is a large organisation with hundreds of connected companies, platforms and offices worldwide. Here is how lawyer Charles Slamowitz commented.

Firstly, the fact that Sam and FTX are linked to the Bahamas adds an extra layer of complexity to the US investigation. Secondly, prosecutors are not as well-versed in large-scale cryptocurrency fraud, a relatively new phenomenon in their practice. Therefore, gathering the necessary information to bring charges is complex and opaque.

In other words, the relative newness of the digital asset industry definitely helps Sam not end up behind bars more quickly than he could.

FTX

Dorsey & Whitney LLP partner Thomas Gorman specialises in defending investigations, SEC enforcement actions and white collar criminal cases. He now agrees that the fact that FTX is headquartered in the Bahamas complicates matters. Here is his quote.

It creates some problems because different aspects of the organisation are governed by the laws of different jurisdictions. This will ultimately affect who and what will be charged – if, indeed, anyone is charged.

Sam Bunkman-Fried is now in the Bahamas, and if the trial becomes much tougher for him, that country has an extradition treaty with the US. However, according to Gorman, no one in Washington has yet decided whether criminal charges should be brought. And if they are brought, it will be some time before the suspect is behind bars.

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In the meantime, Sam can remain silent – at least that is what his lawyers strongly advise him to do. Bankman-Fried hasn’t heeded that advice, though, as he recently attended the DealBook Summit conference in a virtual format. The former CEO may also soon address the US Congress, as Democratic Congresswoman Maxine Waters insists.

Earlier, Waters had sent an informal invitation to Bankman-Fried to attend the next meeting of the House Financial Services Committee that will take place on December 13. Waters’ tweet was published in a neutral tone without a note of coercion to Sam. He responded evasively and in a slightly snide manner, forcing Waters to insist.

Here’s her latest tweet addressing Bankman-Fried.

You definitely need to attend the hearing on the 13th and we are ready to schedule a follow-up hearing if more information becomes available later.

Maxine Waters’ tweet

Waters also hinted at the importance of Sam’s persona.

Based on your role as CEO and your media interviews over the past few weeks, it is clear to us that the information you have so far is sufficient to testify.

BitMEX Vice President Zhenya Mikhalchenko responded to another congresswoman’s call for tougher measures from politicians. Here is the relevant rejoinder.

Ms Waters, with all due respect – let’s stop flirting with the inevitable outcome and stop this farce. Start the extradition process to bring him back to US territory where he can be tried and properly punished for gross and fraudulent misconduct. Issue a subpoena.

Sam Bankman-Fried, founder of cryptocurrency exchange FTX

Obviously, the longer the FTX case drags on, the longer Sam will be able to stay free. The dissatisfaction of the exchange’s creditors and affected investors will grow. It may eventually become one of the reasons for Bankman-Fried’s arrest.


We believe that the proceedings against Sam Bankman-Fried will nevertheless be initiated, and the prosecution will be able to find convincing arguments in favour of FTX founder's guilt. However, the latter has a huge amount of connections, which Sam won through donations. So he's obviously not going to give up here - nor is he going to admit all his contribution to what happened.


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