Bahamas Securities Commission: “The commission is aware of public statements suggesting that clients’ assets were mishandled, mismanaged and/or transferred to Alameda Research. Based on the commission’s information, any such actions would have been contrary to normal governance, without client consent and potentially unlawful.”
The Bahamas Securities Commission just froze FTX's assets in the Bahamas.[1] A provisional liquidator has been appointed. Next stop, bankruptcy.
All the jurisdictions where FTX has a presence are now after Bankman-Fried. US, Japan, Bahamas...
Richmond, CA police department. Alameda Research HQ is at 5327 Jacuzzi St Ste 1c, Richmond, CA 94804. Since they were apparently the recipient of the money, and he's apparently the principal beneficiary of all this, that's where to start. Mr. Bankman-Fried may not physically be there, but they have jurisdiction.
Once there's an arrest warrant, getting away becomes much more difficult.
You're conflating FTX.us (which is regulated) and operates in the USA, and FTX global (where all this chicanery happened) and is located in the Bahamas.
With that said, the SEC is already also investigating any potential links between the two entities. I don't think they'd be stupid enough to cross those wires, but you never know.
No, see Molly White's blog and the WSJ parent article. What seems to have happened is that 1) FTX.intl loaned money to Alameda Research in the US in exchange for some token, 2) Alameda Research, which is a crypto trading firm, speculated with that money and lost, 3) the collateral from Alameda to FTX turned out to have little value, and so 4) FTX.intl goes down. Bear in mind that Mr. Bankman-Fried heads all three organizations.
Whether FTX.us is also involved is not yet clear. But it will be. The SEC and CFTC are descending, with hard questions.
Molly White: "This suggests to me that a) they are in a really bad spot, and b) they want as few people sniffing around in their books as possible." Right. That was probably the real goal of a merger with Binance. In bankruptcy, all the dirty laundry comes out. Being acquired by Binance offered hope of keeping any criminal activity hidden. That hope is now gone.
I fully understand the purported chain of events. But, again: the US does not have jurisdiction over FTX. So why would he "get arrested" in California for embezzlement? He didn't break any US laws. The FTX/Alameda deal was likely done via SAFT[1], which is both legal and popular.
The US has jurisdiction over Mr. Bankman-Fried, who is an American citizen born in California. The US has jurisdiction over Alameda Research, which is a US company operating in California and appears to have been the beneficiary of the scam. That's plenty of jurisdiction.
Thanks - this is the most succinct summary of the financial nexus leading to FTX's spiral into insolvency that I've seen, and squares with my own understanding. What we don't know is how the chain of cause and effect played out over a timeline. How did Alameda lose $10bn? How long has FTX been insolvent?
Surely they have been staring down the end of a barrel for a good while?
The entire point of FTX is that Americans were barred from using it. Now Americans certainly ignored that rule by using vpn’s, but I’m not sure that gives the sec jurisdiction. The Americans using the exchange were explicitly breaking the TOS
The SEC is unusually strong (which might surprise you), and because the American market is so wealthy and the rules are relatively clear, the SEC has a huge influence over investment structure.
