bahamas

SBF met with Biden’s senior advisers 2 months before FTX’s collapse: Report

The FTX founder met with senior White House officials at least four times in 2022.

Former FTX CEO Sam Bankman-Fried met with government officials at the White House on at least four separate occasions in 2022, one of which reportedly occurred just two months before the fall of his crypto empire.

Most of the meetings were disclosed in visitor logs that are posted by the White House every month, with the records showing that Bankman-Fried met with Counselor to the President Steve Ricchetti on April 22 and May 12, along with another meeting on May 13 meeting with policy adviser Charlotte Butash.

However, according to a Dec. 29 Bloomberg report, the former FTX CEO also met with the president’s counselor Ricchette as recently as Sept. 8, a meeting that did not show up on the visitor logs.

White House 2022 visitor logs featuring Sam Bankman-Fried. Source: The White House

The revelation has piqued the curiosity of crypto community members, who want to know why there seemed to be such a revolving door of visitations between FTX and the White House.

As per the Bloomberg report, sources suggested that politics had not been discussed at the meeting, and that conversations were focused on the crypto industry, exchanges and pandemic prevention.

Related: Prosecutors unlikely to offer Sam Bankman-Fried a favorable plea deal, says lawyer

Despite living in the Bahamas, Bankman-Fried is understood to have been a regular visitor to Washington as he pushed to influence crypto policy and make connections there. He was previously accused of attempting to redirect regulators away from centralized exchanges like FTX to decentralized finance (DeFi) platforms such as lending protocol MakerDAO.

Bankman-Fried was a significant donor to the Democrats, and in a Nov. 16 interview with crypto vlogger Tiffany Fong admitted that he had donated about the same to both parties, but that his “Republican donations were dark.”

Sam Bankman-Fried’s life on bail: Armed guards, daily jogs and gawkers

Compared to his prison accommodations in the Bahamas, the former billionaire appears to be living a pretty decent life while under house arrest.

Sam Bankman-Fried has reportedly been leading a decent lifestyle while under house arrest in his parent’s home in Palo Alto — with daily jogs, a security detail, and a couple of in-home visits.

However, it’s not exactly a life of endless luxury either. The former FTX CEO is reportedly required to wear an ankle monitor and is only allowed to leave the house under certain circumstances, among other restrictions.

The aforementioned Palo Alto home, located on the border of Stanford University’s campus, is understood to be a $4 million property equipped with five bedrooms, three bathrooms and a pool, according to real estate listings. 

The property has had to be barricaded on both ends, however, as Bankman-Fried has reportedly faced death threats, while his home has turned into something of a tourist attraction for curious onlookers.

His family is shelling out $10,000 a week for a private security firm, according to a Dec. 27 article from the New York Post.

The home Sam Bankman-Fried is reported to be confined to. Source: Google Maps.

As part of the Dec. 22 bond agreement, Bankman-Fried is required to wear an ankle bracelet, has been forced to surrender his passport and is also required to seek approval for any transactions in excess of $1,000. He is also not allowed to possess a firearm, any other weapon or “destructive device”.

He is only able to leave the property for exercise, substance abuse treatment or mental health treatment — something he is understood to have taken up — with multiple reports indicating he has been going for daily jogs with his security detail in tow.

Related: Bankman-Fried may enter plea in NY federal court next week before Judge Lewis Kaplan

While this is still a far cry from the Bahamas penthouse he was previously living in, it still appears far better than the conditions of his cell in Fox Hill prison in the Bahamas. 

That being said, some in the crypto community have been vocal about Bankman-Fried’s release on bail, particularly considering he was able to do so without any upfront payment.

Instead, hs parents’ property has been put up as security for the record $250 million bond, after Bankman-Fried claimed to only have $100,000 in his bank account following the collapse of FTX.

He’s reportedly already been visited by journalist Michael Lewis, author of the popular trading-focused books The Big Short, Liar’s Poker and Flash Boys, who reportedly has been embedded with SBF for over months as part of a book project. 

On Dec. 28, cryptocurrency vlogger Tiffany Fong revealed on Twitter she had visited Bankman-Fried in his parent’s home for a “conversation” just the night before.

Fong was one of the first to interview Bankman-Fried after the exchange went bankrupt in November, and is expected to write about the meeting after her holiday.

Bankman-Fried has denied criminal liability numerous times since the collapse of FTX. He is set to appear in a New York federal court on Jan. 3 to be arraigned on charges of wire fraud and conspiracy.

SBF signs extradition papers, set to return to face charges in the US

The FTX founder has reportedly signed on the dotted line, bringing him a step closer to returning to US soil.

Sam Bankman-Fried, the jailed founder of the bankrupt cryptocurrency exchange FTX, reportedly signed papers on Dec. 20 that will soon see him handed over to Federal Bureau of Investigation (FBI) agents and flown to the United States to face criminal charges.

The move was expected, as Bankman-Fried was reported to have agreed in principle on Dec. 19 to being extradited to the U.S., despite earlier reports indicating that he wanted to see the indictment against him first.

ABC News reported that Bankman-Fried signed extradition papers on Dec. 20, citing the Bahamas’ acting commissioner of corrections, Doan Cleare.

A Dec. 20 report from Bloomberg quoted Cleare as saying that the exchange founder signed surrender documents on Dec. 20, and was set on Dec. 21 to sign another set of papers waiving his rights to fight extradition, which could see him placed on a flight bound for the U.S. that same day. 

Cointelegraph contacted the acting commissioner’s office for confirmation but did not immediately receive a response.

After the final paper is signed, Bankman-Fried is expected to be whisked away by FBI agents to a private airport and transit to the U.S. on a private flight, where he faces eight counts in an indictment by the U.S. Attorney for the Southern District of New York.

The New York Times reported on Dec. 20 that Bankman-Fried’s legal team is currently in discussion with federal prosecutors to allow him to be released on bail when he is extradited to the United States. 

The agreement would require approval from the federal judge overseeing SBF’s case, and could include “highly restrictive conditions” such as home detention and electronic monitoring, according to people with knowledge of the matter.

He faces charges from the Department of Justice relating to wire fraud, conspiracy to commit money laundering, conspiracy to commit wire fraud, commodities and securities fraud and campaign finance violations.

The charges carry a maximum sentence of 115 years in prison if convicted of all counts.

The FTX founder faces further charges from the Commodity Futures Trading Commission and the Securities and Exchange Commission for allegedly violating commodity laws and defrauding investors.

SBF not in the hospital 

Meanwhile, a Dec. 20 Instagram post from local media outlet Bahamas Press claiming that Bankman-Fried was being “rushed” to the hospital from prison had made the rounds on social media, but was debunked soon after.

Related: SBF’s legal battle still has “a lot to play out,” according to legal commentators

New York Times financial reporter Rob Copeland tweeted that he spoke to the head of the prison, who said the exchange founder was eating lunch in the medical bay and that the rumor was false.

 Bahamas Press then posted an update saying its sources were now reporting t the claim was untrue.

Update (Dec. 21, 1:25 AM UTC): Information added from a Bloomberg report citing Bankman-Fried will transit to the U.S. on Dec. 21.

Update (Dec. 21, 2:48 AM UTC): Added report from NYT suggesting Bankman-Fried is discussing being released on bail upon arriving in the United States.

FTX liquidators’ legal team urges cooperation with Bahamian authorities amid favoritism allegations

According to lawyers representing FTX’s provisional liquidators, allegations that Bahamian officials were giving residents preferential treatment were “wholly without merit.”

A lawyer representing provisional liquidators overseeing FTX’s operations in the Bahamas has pushed back against allegations officials in the country were using the collapse of the crypto exchange to benefit its residents first.

In a Dec. 16 hearing for FTX Trading’s bankruptcy proceedings, White & Case partner Jason Zakia said allegations made by debtors concerning assets and Bahamian authorities were “wholly without merit.” The legal team represented provisional liquidators for FTX Digital Markets — the firm’s operations in the Bahamas — whose appointments were approved by the country’s Supreme Court in November and had “no involvement” in the downfall of FTX prior to its bankruptcy, according to Zakia.

“In any international case like this, there are a multitude of jurisdictions that have legitimate and important interests and that certainly includes the Bahamas,” said Zakia. “The Bahamian legal system is an independent legal system that should be respected. There have been a lot of allegations and aspersions thrown around directed at the Bahamas — the Bahamian government, the Bahamian legal system.”

He clarified:

“One of the allegations […] that Bahamians were somehow facilitating payments off the system to Bahamian residents in preference to other creditors. When you look at the evidence, they have that exactly backwards. [Joint provision liquidators] were appointed specifically as part of an effort to stop such activity.”

FTX filed for bankruptcy under Chapter 11 in the United States District of Delaware on Nov. 11. The bankruptcy court has held a few hearings as part of the proceedings dealing with how the firm’s assets may be handled amid interests from FTX debtors and creditors. The next hearing available to the public is expected on Jan. 11, which will likely address the crypto exchange’s naming rights deal over the FTX Arena.

Related: FTX Bahamas co-CEO Ryan Salame blew the whistle on FTX and Sam Bankman-Fried

In the Bahamas, former FTX CEO Sam Bankman-Fried was sent to prison following a bail hearing on Dec. 13 in conjunction with charges from the U.S. Justice Department. The government agency has warned individuals involved that it was “not done” with arrests.

FTX Bahamas co-CEO Ryan Salame blew the whistle on FTX and Sam Bankman-Fried

Court filings show Ryan Salame tipped off the Bahaman securities regulator, telling them that FTX was sending customer funds to Alameda Research.

A high-ranking executive at FTX’s Bahamian entity tipped off local regulators of potential fraud perpetrated at the cryptocurrency exchange just two days before the exchange was forced to close.

According to Bahamian court records filed on Dec. 14, Ryan Salame, the former co-CEO of FTX Digital Markets (FDM), told the Securities Commission of the Bahamas (SCB) on Nov. 9 that FTX was sending customer funds to its sister trading firm Alameda Research.

Salame said the funds were to “cover financial losses of Alameda” and the transfer was “not allowed or consented to by their clients.”

He also told the SCB only three people had the access required to transfer client assets to Alameda: Former FTX CEO Sam Bankman-Fried, FTX co-founder Zixiao “Gary” Wang and FTX engineer Nishad Singh.

Ryan Salame alerted the securities regulator in the Bahamas regulator to fraudulent activities. Image: Twitter

The allegation spurred SCB executive director Christina Rolle to contact the commissioner of the Royal Bahamas Police Force to request an investigation, as the information “may constitute misappropriation, theft, fraud or some other crime.”

The next day, on Nov. 10, the SCB froze FDM’s assets, suspended its registration in the country and the Bahamian Supreme Court appointed a provisional liquidator attempting to preserve the company’s assets.

The records reveal the first known instance of an executive from FTX or Alameda assisting authorities.

Salame is believed to be in Washington D.C., according to the filings, and has not spoken publicly since the collapse of the exchange.

His last public tweet was on Nov. 7 in which he replied “lol [sic]” to Binance co-founder Yi He, after He explained the reason that the exchange sold its FTX Token (FTT) holdings.

Related: Realized losses from FTX collapse peaked at $9B, far below earlier crises

Another former executive from FTX’s affiliated companies is also thought to have been assisting authorities in recent weeks

On Dec. 4, speculation abounded after pictures purported to show Alameda CEO Caroline Ellison in a New York coffee shop a short walk away from the U.S. Attorney’s Office, leading some to believe she may have been cutting a deal with authorities in the wake of the FTX collapse.

Bankman-Fried is the only person from FTX and Alameda to have been charged so far, adding credence to the speculation that executives from both firms are assisting authorities.

He faces charges related to money laundering and political campaign finance violations, along with wire and securities fraud.

Bankman-Fried, Wang, Singh and Ellison are reported to have operated a group chat on the encrypted messaging app Signal called “Wirefraud” used to send secret information about FTX and Alameda’s operations. Bankman-Fried denied any knowledge or involvement in the group.

Update (Dec. 15, 5:40 am UTC): Further information from the court filing was added along with additional background information.

SBF’s Bahamian prison reported for ‘harsh’ conditions and ‘degrading treatment’ — US State Dept

Bahamian Commissioner of Correctional Services Doan Cleare reportedly said that most of the facilities had been renovated since 2021 and now had no “issues with rodents.”

After being denied bail in a Bahamas Magistrate Court, former FTX CEO Sam Bankman-Fried could spend up to two months in the country’s Fox Hill Prison, a facility with reported cases of physical abuse against prisoners and “harsh” conditions.

Authorities in the Bahamas reportedly remanded Bankman-Fried to the medical wing of Fox Hill following a Dec. 13 hearing. SBF’s counsel said he had been taking medication prior to his arrest on Dec. 12, including Adderall and anti-depressants, but it’s unclear if the former CEO will serve his time at the correctional facility, its medical unit, or an alternative location.

According to a 2021 human rights report from the U.S. State Department, conditions at Fox Hill were “harsh.” Investigations determined that the facility was overcrowded, prisoners had poor nutrition, and there was inadequate sanitation and medical care. The report also alleged cases of physical abuse by correctional officers.

“Maximum-security cells for men measured approximately six feet by 10 feet and held up to six persons with no mattresses or toilet facilities,” the report said. “Inmates removed human waste by bucket. Prisoners complained of the lack of beds and bedding. Some inmates developed bedsores from lying on bare ground. Sanitation was a general problem, and cells were infested with rats, maggots, and insects.”

Fox Hill is the Bahamas’ only prison, and the Carmichael Road Detention Center was intended for short-term stays. However, Bahamian Commissioner of Correctional Services Doan Cleare reportedly said that most of the facilities had been renovated following the State Department report and had no “issues with rodents.”

Bankman-Fried will likely remain in custody in the Bahamas until February as extradition proceedings with the United States move forward. The former FTX CEO faces charges from the Justice Department, Commodity Futures Trading Commission, and Securities and Exchange Commission related to defrauding investors and lender.

Many in the crypto space had been calling for Bankman-Fried’s arrest following FTX’s liquidity crisis and subsequent bankruptcy. The former CEO went on an ‘apology tour’ on major media outlets almost up to the moment he was arrested by authorities, although many pointed out what they deemed inconsistencies and falsehoods in his statements.

Related: Hours before his arrest, SBF denied being part of ‘Wirefraud’ chat group

Conspiracy theories abound on social media regarding SBF’s fate in the Bahamas or upon his potential return to the United States, with some speculating he would attempt to bribe his way out of prison. If returned to the U.S. and found guilty of all charges, reports indicate he could face a 115-year sentence.

Breaking: FTX founder Sam Bankman-Fried arrested, set to be extradited to US

Royal Bahamas police have arrested SBF at the request of the U.S. government, based on a sealed indictment.

Sam Bankman-Fried has been arrested by authorities in the Bahamas at the request of the U.S. government, just a day before the disgraced former FTX CEO was due to testify before Congress.

Bankman-Fried was arrested by the Royal Bahamas Police Force following a formal notification from the United States government that it has filed criminal charges against him, according to a Dec. 12 statement from the Bahamas Attorney General (AG) and Minister of Legal Affairs, Ryan Pinder.

Citing a person with knowledge of the matter, The New York Times reported on Dec. 12 that the charges against Bankman-Fried include wire and securities fraud, conspiracy to commit wire and securities fraud and money laundering, 

The U.S. will likely request the extradition of Bankman-Fried, with Pinder stating that the Bahamas will “promptly” process any extradition request.

Bahamian Prime Minister Philip Davis said in a statement that both countries have “a shared interest in holding accountable all individuals associated with FTX who may have betrayed the public trust and broken the law.

A Dec. 12 tweet from the U.S. Attorney’s Office for the Southern District of New York said authorities in the Bahamas arrested Bankman-Fried based on a sealed indictment it filed that it plans to unseal “in the morning.”

Bloomberg reported on Dec. 10 that prosecutors from New York, FBI agents and regulators met with FTX’s lawyers to discuss the documentation that investigators want to obtain.

Related: SBF tried to destabilize crypto market to save FTX: Report

The U.S. Department of Justice (DOJ) was “closely” examining whether FTX improperly transferred hundreds of millions around the same time as the company declared bankruptcy on Nov. 11.

Bahamian authorities were similarly undertaking their own “active and ongoing” investigation into FTX as announced on Nov. 27 by Pinder that involved the country’s Securities Commission, the Financial Intelligence Unit and the police’s financial crimes unit.

Bankman-Fried’s arrest comes a day before he was expected to appear remotely to testify before the House Committee on Financial Services in a hearing investigating the collapse of the exchange.

The letter announcing the arrest from the Bahamas Attorney General.

FTX names Kroll as claims agent, to update users on bankruptcy developments

Claims and noticing agents such as Kroll are often assigned to bankruptcy cases where the number of creditors exceeds a thousand.

Bankrupt crypto exchange FTX has appointed restructuring administration firm Kroll as its agent to track all claims against FTX and ensure interested parties are notified of developments throughout its Chapter 11 bankruptcy case.

Known as the “claims and noticing agent,” Kroll was appointed to the role on Nov. 12, with the news made public on Nov. 17 and aims to compile a database of all claims against FTX Trading and 101 affiliated companies.

At the time of writing, this database lists only eight claims, including one from Singaporean-based blockchain development firm Ethereal Tech for $11.7 million, but will soon be fleshed out as more claims against the group are lodged.

For example, one other case that Kroll has worked on, that of rental car company Hertz, has 62,061 claims against it from its Chapter 11 bankruptcy case.

The eight claims currently included already amount to $40.9 million, though FTX Trading alone is understood to owe customers and investors as much as $8 billion.

Within the filing, the firm has also compiled a list of interested parties it will keep updated on developments, which it acknowledges is incomplete and does not currently include customers.

This list is currently composed of approximately 750 parties who have some kind of interest in the case, with some of the included groups consisting of debtors, banks, landlords, insurance providers, directors, landlords and regulators.

Some noteworthy names included in the list are National Australia Bank (NAB), Apple, Facebook, JPMorgan, Chainalysis, Wells Fargo, Bank of America, Circle, Stephen Curry, Reddit and Yuga Labs.

Meanwhile, the number of creditors involved with FTX is thought to be in excess of one million, and corporate securities lawyer Margaret Rosenfeld told Cointelegraph it will take years before any begin to receive any funds back, adding:

“You can’t make creditor distributions until these claims are analyzed. It’s also way too early to speculate on what kind of distribution creditors will get back. Though in mega cases, such as this, full recovery would be unusual.”

Kroll Restructuring Administration is an indirect subsidiary of Kroll LLC, which is one of the world’s largest corporate intelligence companies. Notably, the firm had been employed by Harvey Weinstein on multiple occasions, including when allegations of sexual harassment were brought against him in 2016.

Related: SBF received $1B in personal loans from Alameda: FTX bankruptcy filing

The parent company offers a wide range of services in areas such as environmental, social, and corporate governance (ESG), valuation, compliance, cyber risk, investigations and corporate finance.

On Nov. 15, regulators in the Bahamas argued that FTX’s new CEO lacks the authority to initiate Chapter 11 proceedings in the United States, with the provisional liquidator overseeing the bankruptcy proceedings of FTX Digital Markets in the Bahamas rejecting the “validity of any purported attempt to place FTX Affiliates in bankruptcy.”

Bahamas supreme court approves ‘provisional liquidators’ for FTX

The Securities Commission of the Bahamas said it had to act “given the magnitude, urgency, and international implications of the unfolding events with regard to FTX.”

The Supreme Court of the Bahamas — where FTX Digital Marketsis headquartered — has approved two provisional liquidators to oversee the crypto exchange’s assets.

According to a Nov. 14 announcement from the Bahamas’ Securities Commission, the country’s supreme court approved the appointments of PricewaterhouseCoopers advisory partner Kevin Cambridge and partner Peter Greaves to act as “joint provisional liquidators” for FTX. The securities regulator also applied to have Brian Simms, a senior partner of Bahamas-based commercial law firm Lennox Patton, as a provision liquidator on Nov. 10.

“Given the magnitude, urgency, and international implications of the unfolding events with regard to FTX, the Commission recognized that it had to, and moved swiftly to use its regulatory powers […] to further protect the interests of clients, creditors, and other stakeholders globally of FTX Digital Markets Ltd,” said the Securities Commission.

The regulator added:

“Over the coming days and weeks, the Commission expects to engage with other supervisory authorities on a regulator-to-regulator basis as this event is multijurisdictional in nature.”

FTX announced on Nov. 11 that the company would be filing for bankruptcy under Chapter 11 in the United States’ District of Delaware. The proceedings included more than 130 firms in FTX Group, including FTX Trading, FTX US, under West Realm Shires Services, Alameda Research, and its Bahamas-based subsidiary FTX Digital Markets. Sam Bankman-Fried also resigned his position amid the firm’s liquidity crisis and bankruptcy.

Related: FTX’s ongoing saga: Everything that’s happened until now

The appointment of a provisional liquidator followed the Bahamas securities regulator suspending FTX’s registration status and freezing its local subsidiary’s assets on Nov. 10. The Royal Bahamas Police Force was also reportedly looking into FTX as part of an investigation of possible criminal misconduct.

Bahamas’ supreme court approves ‘provisional liquidators’ for FTX

The Securities Commission of the Bahamas said it had to act “given the magnitude, urgency, and international implications of the unfolding events with regard to FTX.”

The Supreme Court of the Bahamas has approved two provisional liquidators to oversee the assets of crypto exchange FTX Digital Markets, which is headquartered in the country.

According to a Nov. 14 announcement from the Bahamas’ Securities Commission, the country’s supreme court approved the appointments of PricewaterhouseCoopers advisory partner Kevin Cambridge and partner Peter Greaves to act as “joint provisional liquidators” for FTX. The securities regulator also applied to have Brian Simms, a senior partner of Bahamas-based commercial law firm Lennox Patton, as a provisional liquidator on Nov. 10.

“Given the magnitude, urgency, and international implications of the unfolding events with regard to FTX, the Commission recognized that it had to, and moved swiftly to use its regulatory powers […] to further protect the interests of clients, creditors, and other stakeholders globally of FTX Digital Markets Ltd,” said the Securities Commission.

The regulator added:

“Over the coming days and weeks, the Commission expects to engage with other supervisory authorities on a regulator-to-regulator basis as this event is multijurisdictional in nature.”

FTX announced on Nov. 11 that the company would be filing for bankruptcy under Chapter 11 in the United States District of Delaware. The proceedings included more than 130 firms in FTX Group, including FTX Trading, FTX US — under West Realm Shires Services — Alameda Research and its Bahamas-based subsidiary FTX Digital Markets. Sam Bankman-Fried also resigned from his position amid the firm’s liquidity crisis and bankruptcy.

Related: FTX’s ongoing saga: Everything that’s happened until now

The appointment of a provisional liquidator followed the Bahamian securities regulator suspending FTX’s registration status and freezing its local subsidiary’s assets on Nov. 10. The Royal Bahamas Police Force was also reportedly looking into FTX as part of an investigation of possible criminal misconduct.