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Culture War Roundup for the week of December 12, 2022

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Sam Bankman-Fried has been arrested.

FTX founder Sam Bankman-Fried was arrested by Bahamian authorities this evening after the United States Attorney for the Southern District of New York shared a sealed indictment with the Bahamian government, setting the stage for extradition and U.S. trial for the onetime crypto billionaire at the heart of the crypto exchange’s collapse.

Bankman-Fried was expected to testify before the House Financial Services Committee on Tuesday. His arrest is the first concrete move by regulators to hold individuals accountable for the multi-billion dollar implosion of FTX last month.

There had been some speculation on when and even whether he would be arrested. Just yesterday someone told me to expect it to take two years. So, why right before tomorrow's hearing? And why not wait for him to give more interviews and provide more evidence?

You got there just before me 😁 So, this happened faster than I expected, but everyone downthread saying he'd never be arrested/it wouldn't be for years, seems we were all wrong.

As to why now right before the hearing? No idea, unless (1) somebody (Ellison?) dropped a lot of testimony into their laps so they could do it now or (2) they had reason to suspect he wasn't going to turn up but was going to do a runner or (3) it's simply because there has been so much talk going around about "he donated all this money to the Democrats, he's bought his freedom" and this isn't a good look for the current administration to be suspected of 'get away with crime thanks to bribery'.

EDIT: News just in! Allegedly he refused to testify before the committee, so looks like if he wouldn't co-operate, he's going to face the consequences:

Former FTX CEO Sam Bankman-Fried is refusing to testify at a hearing this week about his company’s implosion, the Senate Banking Committee said Monday.

Attorneys for the crypto platform’s founder have also said Bankman-Fried, who is based in the Bahamas, will not accept service of a subpoena to compel his testimony before the panel, senators said.

Bankman-Fried is scheduled to appear at a House Financial Services Committee hearing on Tuesday that will focus on his company’s collapse.

In a joint statement, Senate Banking Chair Sen. Sherrod Brown, D-Ohio and ranking member Pat Toomey, R-Pa., said they have “offered Sam Bankman-Fried two different dates for providing testimony before the Senate Banking, Housing, and Urban Affairs Committee, and are willing to accommodate virtual testimony.”

I honestly think a lot of people ensconced in an online world of overnight Prime shipping don't realize that it takes time to actually build evidence, even for something obvious, and to get things done. Note, as a social democrat, I get upset w/ my more left-leaning friends who expect Congress to act like a Doordash order, as well.

There was likely no fishiness about how long it took, outside of the usual fishiness when you're dealing with a defendant who might actually have good lawyers, which means the gov't actually has to be careful, as opposed to some random DA going after some random gang member who shot another gang member.

I agree with this. I thought the fraud aspect in particular would take awhile to gather evidence to prove. The DoJ moving this quick makes me believe they have strong hard evidence (emails, slack messages, testimony from executives) that prove intent. SBF is cooked.

I did think it would take a lot longer, which does give more credence to the speculation that Ellison was cutting a deal with the prosecutors by turning over everything she knew/had about Bankman-Fried. And if he was backing out of turning up to the Senate Banking Committee hearing (allegedly due to his counsel - whoever that is today EDIT: Cohen and Gresser of New York - refusing to accept service of the subpoena), then I imagine the gloves came off. All the shooting his mouth off didn't help, either. And I wonder about Wang and Singh, the other co-founders - are they cutting deals too?

If so, then there may well be enough evidence for charges this fast, and the Bahamian authorities are certainly being very co-operative. Did Bankman-Fried expect them to hold out longer and even give him refuge? If so, he made another bad decision there.

He does seem to have agreed to testify before the House Financial Services Committee (all these committees are confusing) but given that he's now been arrested, will that still go ahead?

It looks like he agreed to turn up to the Tuesday (House) committee but refused to testify before the Wednesday (Senate) committee, which may have stoked fears that he was only showing up so he could go on the run in the US and/or try to get out, which might have been easier than trying to fly out of the Bahamas. I have no idea, but the arrest might well be precautionary so he doesn't pull a "here today, gone tomorrow" stunt.

The Senate committee (via a letter sent to him) wanted a written statement from him, so that might be why he declined to appear: he's relying on showing up and burbling something at the House committee, because he seems to be good at slinging words words words in person, but if he writes anything down that's fatal, that is providing the rope to hang himself.

EDIT: While I'm waiting for the next matches in the World Cup (semi-final between Argentina and Croatia this evening, France versus Morocco tomorrow), there will be a livestream of the House Committee on Financial Services hearing today at 10:00 a.m. ET (3:00 p.m. my time) with John J. Ray as witness and potentially? Sam Bankman-Fried as well. I will have to tune in to see if he does turn up or if he can't make it due to being in the slammer 😁