US officials are questioning the timing of FTX founder Sam Bankman-Fried’s arrest

A bipartisan duo of lawmakers Monday night questioned the wisdom of arresting disgraced crypto king Sam Bankman-Fried the day before he was due to testify before Congress about the collapse of his FTX exchange.

The 30-year-old FTX founder was arrested by authorities in the Bahamas Monday night after US prosecutors filed criminal charges against him.

But Bankman-Fried’s sudden arrest means the scruffy former billionaire is freed from testifying before the House Financial Services Committee on Tuesday.

Rep. Lee Zeldin (R-NY) was among those who criticized the timing of his detention. tweet that House Republicans were “ready to grill him six times through Sunday” when one of the world’s largest cryptocurrency exchanges failed.

“Tomorrow Sam Bankman-Fried was due to testify before the House Financial Services Committee… Tonight SBF just got arrested!” Zeldin wrote.

Sam Bankman-Fried will testify during the House Financial Services Committee hearing on December 8, 2021.
Sam Bankman-Fried will testify during the House Financial Services Committee hearing on December 8, 2021.
CQ-Roll Call, Inc via Getty Images

“Why don’t you allow him to testify for the first time tomorrow and answer our many questions?”

Rep. Maxine Waters (D-Calif.), who is Chair of the Financial Services Committee, echoed those concerns and said she was “disappointed” that the arrest came before Bankman-Fried testified.

“While Mr. Bankman-Fried must be held accountable, the American public deserves to hear directly from Mr. Bankman-Fried about the actions that have harmed over a million people and wiped out the hard-earned life savings of so many,” said Waters said in a expression.

“The public has eagerly awaited these answers under oath before Congress, and the timing of this arrest denies the public that opportunity.”

But lawmakers weren’t the only ones questioning the decision.

Bankman-Fried had been under investigation since FTX collapsed and filed for bankruptcy protection on November 11.
Bankman-Fried had been under investigation since FTX collapsed and filed for bankruptcy protection on November 11.
AFP via Getty Images

Abe Hamadeh, a former prosecutor and GOP candidate for Arizona attorney general, said the decision to arrest Bankman-Fried on the eve of his testimony didn’t make tactical sense.

“As a former prosecutor, that makes little sense. You want him to talk…”, Hamadeh tweeted.

Others seemed to claim that Bankman-Fried was allegedly spared because he had donated millions of dollars to Democratic political campaigns and mostly left-leaning political causes in the past.

“We ALL know the real reason mega-Democrat donor Sam Bankman-Fried was arrested today…so he wouldn’t have to testify before Republicans on the House Financial Services Committee tomorrow,” said America First Institute’s Javon A. Price Politics, tweeted.

Bankman-Fried had been under investigation by the Justice Department since FTX imploded and filed for bankruptcy protection on Nov. 11 after traders rushed to withdraw $6 billion from the platform in just three days.

A photo of the luxurious Albany Bahamas - where Bankman-Fried resided - is shown.
A photo of the luxurious Albany Bahamas – where Bankman-Fried resided – is shown.
Albany, Bahamas

The former billionaire, who resigned as FTX CEO on the day of the bankruptcy filing, planned to take action against his former attorneys – Sullivan and Cromwell – and new FTX CEO John Ray during the congressional hearing.

According to a draft of his testimony obtained by Reuters, Bankman-Fried had planned to say he was pressured by lawyers to appoint Ray as CEO after client funds were suddenly withdrawn.

He changed his mind 10 minutes later after receiving an offer for billions of dollars in new funding, but claimed he was told it was too late to remove Ray.

Bankman-Fried has repeatedly denied personal responsibility for the platform’s collapse and has distanced himself from allegations of fraud, insisting he “never attempted to commit fraud”.

He planned to repeat those claims in his testimony, saying, “I want to start by officially declaring under oath: I screwed up.”

Damian Williams, the US Attorney for the Southern District of New York, said the indictment against Bankman-Fried would be unsealed on Tuesday.

The charges include wire fraud, wire fraud conspiracy, securities fraud, securities fraud conspiracy and money laundering, the New York Times reported, citing a person with knowledge of the matter.

Federal prosecutors have reportedly been investigating how FTX handled client funds and the alleged transfer of hundreds of millions of dollars from the US to the Bahamas around the time of the bankruptcy filing.

They are also said to be investigating whether Bankman-Fried manipulated the crypto markets by orchestrating trades that led to the collapse of the cryptocurrency TerraUSD earlier this year.

With postal wires

https://nypost.com/2022/12/13/us-reps-question-timing-of-ftx-founder-sam-bankman-frieds-arrest/ US officials are questioning the timing of FTX founder Sam Bankman-Fried’s arrest

JACLYN DIAZ

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