NEW YORK — The cryptocurrency entrepreneur Sam Bankman-Fried was expected to make his initial U.S. court appearance Thursday on charges that he swindled investors and looted customer deposits on his FTX trading platform.
Bankman-Fried, arrested in the Bahamas last week, was flown to New York late Wednesday after deciding not to challenge his extradition.
While he was in the air, the U.S. attorney in Manhattan announced that two of Bankman-Fried’s closest business associates had also been charged and had secretly pleaded guilty.
Carolyn Ellison, 28, the former chief executive of Bankman-Fried’s trading firm, Alameda Research, and Gary Wang, 29, who co-founded FTX, pleaded guilty to charges including wire fraud, securities fraud and commodities fraud.
U.S. Attorney Damian Williams said in a video statement that both were cooperating with investigators and had agreed to assist in any prosecution. He warned others who enabled the alleged fraud to come forward.
“If you participated in misconduct at FTX or Alameda, now is the time to get ahead of it,” he said. “We are moving quickly, and our patience is not eternal.”
Prosecutors and regulators contend that Bankman-Fried, 30, was at the center of several illegal schemes to use customer and investor money for personal gain. He faces the possibility of decades in prison if convicted on all counts.
In a series of interviews before his arrest, Bankman-Fried said he never intended to defraud anyone.
Bankman-Fried is charged with using money, illicitly taken from FTX customers, to enable trades at Alameda, spend lavishly on real estate, and make millions of dollars in campaign contributions to U.S. politicians.
FTX, founded in 2019, rode the crypto investing phenomenon to great heights quickly, becoming one of the world’s largest exchanges for digital currency. Seeking customers beyond the tech world, it hired the comic actor and writer Larry David to appear in a TV ad that ran during the Super Bowl, hyping crypto as the next big thing.
Bankman-Fried’s crypto empire, however, abruptly collapsed in early November when customers pulled deposits en masse amid reports questioning some of its financial arrangements.
A Bahamas judge on Wednesday approved the extradition of former billionaire Sam Bankman-Fried, the founder of befallen crypto exchange FTX, from a Nassau jail to the United States, where the former crypto wunderkind faces a slew of criminal charges.
Sam Bankman-Fried, the former billionaire crypto wunderkind now jailed in the Bahamas and facing a litany of criminal charges for alleged fraud, did not agree to extradition back to the U.S. as expected in a Monday court hearing.
Sam Bankman-Fried is in a courthouse in the Bahamas where he is expected to tell a judge he will not fight extradition to the U.S., where he faces multiple criminal and civil charges related to the collapse of cryptocurrency exchange FTX
Sam Bankman-Fried arrived a courthouse in the Bahamas early Monday and is expected to tell a judge he will not fight extradition to the U.S., where he faces multiple criminal and civil charges related to the collapse of cryptocurrency exchange FTX.
The decision comes just a week after Bankman-Fried’s lawyers had initially said that they planned to fight extradition. An extradition hearing had been scheduled for Feb. 8. His turnabout could speed up the timetable for him to be sent to the U.S.
Bahamian authorities arrested Bankman-Fried last Monday at the request of the U.S. government. The former FTX CEO faces criminal charges in the U.S., including wire fraud and money laundering, as well as civil charges. The 30-year-old could potentially spend the rest of his life in jail.
Bankman-Fried’s downfall, from crypto evangelist to pariah, occurred with stunning speed. FTX filed for bankruptcy protection on Nov. 11 when it ran out of money after the cryptocurrency equivalent of a bank run.
Before the bankruptcy, Bankman-Fried was considered by many in Washington and on Wall Street as a wunderkind of digital currencies, someone who could help take them mainstream, in part by working with policymakers to bring more oversight and trust to the industry.
Bankman-Fried had been worth tens of billions of dollars — at least on paper — and was able to attract celebrities like Tom Brady or former politicians like Tony Blair and Bill Clinton to his conferences at luxury resorts in the Bahamas. One prominent Silicon Valley firm, Sequoia Capital, invested hundreds of millions of dollars in FTX.
U.S. prosecutors and financial regulators painted a very different picture of Bankman-Fried and FTX last week. An indictment unsealed Tuesday alleging he played a central role in the rapid collapse of FTX and hid its problems from the public and investors. The Securities and Exchange Commission said Bankman-Fried illegally used investors’ money to buy real estate on behalf of himself and his family.
The new CEO of FTX, John Ray III, told a congressional committee on Tuesday that there was nothing sophisticated about what Bankman-Fried was up to.
“This is just old fashion embezzlement, taking money from others and using it for your own purposes,” he said.
Former FTX CEO Sam Bankman-Fried is expected to appear in a Bahamas court on Monday to reverse his decision to contest extradition to the US, a person familiar with the matter told CNN.
The New York Times also reported that Bankman-Fried is expected to agree to extradition to the US, citing a person briefed on the matter.
CNN has reached out to Bankman-Fried’s lawyers, and the Bahamas Attorney General.
The Bahamas police PIO Superintendent Chrislyn Skippings told CNN on Sunday, “If he does go to court tomorrow it would be at Nassau street court complex,located on Nassau street and South streets.”
Last Tuesday, federal prosecutors from the Southern District of New York charged Bankman-Fried with eight counts of fraud and conspiracy. Bankman-Fried could face up to 115 years in prison if convicted on all eight counts against him, though he likely wouldn’t get the maximum sentence.
On top of that, US market regulators filed civil lawsuits accusing Bankman-Fried of defrauding investors and customers, saying he “built a house of cards on a foundation of deception while telling investors that it was one of the safest buildings in crypto.”
Bankman-Fried remains in the Bahamas, where FTX was based, and was arrested last Monday night. He was arraigned Tuesday, and a Bahamian judge denied his request for bail, saying that he posed a flight risk. His extradition to the United States could take weeks.
Sam Bankman-Fried could soon be headed for a U.S. prison to face fraud charges. The former CEO of FTX—the cryptocurrency exchange that went abruptly bankrupt last month—is currently being held in a jail in the Bahamas.
Bahamian authorities arrested him on Monday following a formal notification by the U.S. government that it had filed criminal charges against him and would likely request his extradition. The U.S. and the Bahamas have had an extradition process in place since 1994, when a treaty signed by both countries came into force.
On Tuesday, a Bahamian judge denied him bail, deeming him a flight risk. During the arraignment proceedings, Bankman-Fried’s lawyer said he would fight plans to send him to the U.S., and an extradition hearing was set for Feb. 8.
But now Bankman-Fried is expected to appear in a Bahamian court on Monday to reverse his decision to contest extradition, Reuters reported.
Federal prosecutors in New York have charged Bankman-Fried with eight criminal counts, including conspiracy and wire fraud, for allegedly misusing billions of dollars in customers’ funds. He faces up to 115 years in prison if convicted on all eight counts.
‘Open and shut case for fraud’
Last month, billionaire Mark Cuban said he’d “be afraid of going to jail for a long time” if he were Bankman-Fried.
And earlier this month, Brain Armstrong, CEO of the U.S.-based crypto exchange Coinbase, said it was “baffling” why Bankman-Fried wasn’t already in prison.
“The DOJ or somebody should be able to make—just based on his public statements, I think there’s a very open and shut case for fraud,” Armstrong said at the a16z crypto Founder Summit.
FTX’s implosion last month surprised many inside and outside of the crypto sector. The $32 billion exchange had established itself as a leader in the field, having enlisted star athletes like Tom Brady and other celebrities to bolster its image.
Bankman-Fried resigned as CEO on Nov. 11, the same day that FTX filed for bankruptcy. A key accusation leveled against him is that he used customer funds from his crypto exchange to fund risky bets at Alameda Research, his misleadingly named crypto hedge fund.
He’s now being held at Fox Hill prison in the Bahamas, according to Reuters, a jail described as “harsh” by the U.S. State Department last year, with overcrowding and a rodent infestation at the time.
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WASHINGTON — Sam Bankman-Fried, founder and former CEO of the failed cryptocurrency exchange FTX, helped 1,500 Bahamian investors remove $100 million from their accounts while other customers around the world were locked out of the exchange, according to the company’s new CEO, who testified before a House committee Tuesday
FTX CEO John Ray III, who has guided dozens of companies, including Enron, through bankruptcy restructuring, called FTX’s collapse one of the worst business failures he has seen — a “paperless bankruptcy,” fueled by an “unprecedented lack of documentation.”
For nearly four hours, without a break, Ray told lawmakers about the lack of oversight and financial controls that he discovered since taking over FTX a month ago. He found a loan where Bankman-Fried was both the issuer and the recipient. There were expenses approved by emoji. FTX didn’t have accountants. For record-keeping, employees used QuickBooks, pre-packaged software typically used by small and medium-sized businesses, to manage FTX’s finances.
“Nothing against QuickBooks,” Ray said. “It’s a very nice tool, just not for a multibillion-dollar company.”
At its peak, FTX’s market value topped $30 billion.
Notably absent from the hearing before the House Financial Services Committee was Bankman-Fried, who was arrested in the Bahamas just hours before he was scheduled to testify. The arrest was made at the request of the U.S. government, which on Tuesday announced criminal charges against Bankman-Fried including wire fraud and money laundering.
The timing of Bankman-Fried’s arrest frustrated many committee members. Republican Rep. William Timmons, of South Carolina, called the timing “bizarre” and added that, as a former prosecutor, he couldn’t imagine why any prosecutor wouldn’t want “hours of congressional grilling for the target of an investigation” to help make a case.
FTX filed for bankruptcy protection on Nov. 11, when the firm ran out of money after the cryptocurrency equivalent of a bank run. The collapse of crypto’s second-largest exchange has garnered worldwide attention, and prompted worries in the crypto industry that the pain could become widespread. Ray estimated that about $8 billion of customer funds are missing.
Some customers in the Bahamas, where FTX was based, were able to recover some money, Ray said. That’s because the Bahamian government and Bankman-Fried agreed to let them get their money out of FTX while customers in other countries were blocked from doing so, Ray said.
Ray, who took over FTX on Nov. 11, told the committee that the problems at FTX were a cumulation of months or even years of bad decisions and poor financial controls.
“This is not something that happened overnight or in a context of a week,” he said.
However, Ray didn’t answer numerous questions about what regulations could have stopped the collapse of FTX. Instead, he focused on how unusual FTX was — having no board of directors, having no real structure that prohibited money invested by consumers in FTX to be shifted to Bankman-Fried’s hedge fund Alameda Research for other investments or lavish purchases, without the original investors’ knowledge.
In his prepared remarks, Ray painted a picture of a company acting with little to no oversight.
“FTX Group’s collapse appears to stem from the absolute concentration of control in the hands of a very small group of grossly inexperienced and unsophisticated individuals who failed to implement virtually any of the systems or controls that are necessary for a company that is entrusted with other people’s money or assets,” Ray said.
In interviews since FTX filed for bankruptcy protection, Bankman-Fried acknowledged that the company lacked proper financial controls and corporate governance, but denied any fraud had been committed.
U.S. prosecutors and financial regulators disagreed with that assessment. An indictment unsealed Tuesday charged Bankman-Fried with a host of financial crimes and campaign finance violations, alleging he played a central role in the rapid collapse of FTX and hid its problems from the public and investors. The Securities and Exchange Commission said Bankman-Fried illegally used investors’ money to buy real estate on behalf of himself and family.
Ray’s comments supported those allegations.
“This is just old fashion embezzlement, taking money from others and using it for your own purposes,” he said. “This is not sophisticated at all.”
A lawyer for Bankman-Fried, Mark S. Cohen, said Tuesday he is “reviewing the charges with his legal team and considering all of his legal options.”
Before he was arrested Monday in the Bahamas, disgraced FTX founder and former CEO Sam Bankman-Fried was planning to testify before Congress on Tuesday about the dramatic collapse of his cryptocurrency exchange.
NEW YORK (AP) — The former CEO of failed cryptocurrency firm FTX, Sam Bankman-Fried, has been arrested in the Bahamas at the request of the U.S. government, U.S. and Bahamian authorities said Monday.
The arrest was made Monday after the U.S. filed criminal charges that are expected to be unsealed Tuesday, according to U.S. Attorney Damian Williams. Bankman-Fried had been under criminal investigation by U.S. and Bahamian authorities following the collapse last month of FTX. The firm filed for bankruptcy on Nov. 11, when it ran out of money after the cryptocurrency equivalent of a bank run.
“We expect to move to unseal the indictment in the morning and will have more to say at that time,” Williams said.
Bahamian Attorney General Ryan Pinder said the Bahamas would “promptly” extradite Bankman-Fried to the U.S. once the indictment is unsealed and U.S. authorities make a formal request. FTX is headquartered in the Bahamas and Bankman-Fried has largely remained in his Bahamian luxury compound in Nassau since the company’s failure.
A spokesman for Bankman-Fried had no comment Monday evening. Bankman-Fried has a right to contest his extradition, which could delay but not likely stop his transfer to the U.S.
Bankman-Fried’s arrest comes just a day before he was due to testify in front of the House Financial Services Committee. Rep. Maxine Waters, D-Calif., chairwoman of the committee, said she was “disappointed” that the American public, and FTX’s customers, would not get to see Bankman-Fried testify under oath.
Bankman-Fried was one of the world’s wealthiest people on paper, with an estimated net worth of $32 billion. He was a prominent personality in Washington, donating millions of dollars toward mostly left-leaning political causes and Democratic political campaigns. FTX grew to become the second-largest cryptocurrency exchange in the world.
That all unraveled quickly last month, when reports called into question the strength of FTX’s balance sheet. Customers moved to withdraw billions of dollars, but FTX could not meet all the requests because it apparently used its customers deposits to cover bad bets at Bankman-Fried’s investment arm, Alameda Research.
Bankman-Fried said recently that he did not “knowingly” misuse customers’ funds, and said he believes his millions of angry customers will eventually be made whole.
The House Financial Services Committee is still expected to hear testimony Tuesday from current CEO John Ray III. Ray, who took over FTX on Nov. 11 and is a long-time restructuring specialist, has said in court filings that the financial conditions at FTX were worse than at Enron.
Bahamian authorities plan to continue their own investigation into Bankman-Fried.
“The Bahamas and the United States have a shared interest in holding accountable all individuals associated with FTX who may have betrayed the public trust and broken the law,” said Bahamian Prime Minister Philip Davis, in a statement.
The U.S. Securities and Exchange Commission said it had authorized separate charges related to alleged violations of securities laws and would file them publicly Tuesday.
Sam Bankman-Fried, the founder of the collapsed FTX cryptocurrency exchange, has been arrested in The Bahamas after being criminally charged by prosecutors in the United States.
The 30-year-old was taken into custody in the Caribbean nation after US prosecutors notified them they had filed charges and planned to seek his extradition, the Office of the Attorney General of the Bahamas said in a statement on Monday.
The US has not elaborated on the nature of the charges.
FTX filed for Chapter 11 bankruptcy protection in the US last month.
Here is a history of FTX since it was set up in 2019:
2019
May: Former Wall Street trader Sam Bankman-Fried and ex-Google employee Gary Wang found FTX, the owner and operator of cryptocurrency exchange FTX.COM.
2021
July: FTX concludes a $900m funding round, which values the exchange at $18bn.
September: FTX signs a sponsorship deal with the Mercedes Formula 1 team.
October: FTX raises capital at a valuation of $25bn from investors, including Singapore’s Temasek and Tiger Global.
2022
January 27: FTX’s US arm puts its valuation at $8bn after raising $400m in its first funding round from investors, including SoftBank Group and Temasek.
Sam Bankman-Fried founded the crypto exchange FTX in 2019 and went on to raise billions from prominent investors [File: Saul Loeb/AFP]
January 31: FTX raises $400m from investors, including SoftBank, at a valuation of $32bn.
June 4: FTX signs for naming rights for the home arena of basketball’s Miami Heat in a deal reportedly worth $135m.
July 1: FTX signs a deal with an option to buy embattled crypto lender BlockFi for as much as $240m.
July 22: FTX offers a partial bailout of bankrupt crypto lender Voyager Digital. Voyager calls it a “low-ball bid”.
August 19: A US bank regulator orders FTX to halt “false and misleading” claims it has made about whether funds at the company are insured by the government.
November 2: Crypto news website CoinDesk reports a leaked balance sheet that shows Alameda Research, Bankman-Fried’s crypto trading firm, was heavily dependent on FTX’s native token, FTT. The Reuters news agency was unable to verify the report.
November 6: Binance CEO Changpeng Zhao says his firm plans to liquidate its holdings of FTT due to unspecified “recent revelations”.
November 7: Bankman-Fried says “FTX is fine. Assets are fine”.
November 8: Binance says it is planning a deal to acquire FTX.
November 10: FTX suspends onboarding of new clients as well as withdrawals until further notice. Bankman-Fried tells staff in a memo that he is scrambling to raise funds and has held talks with Justin Sun, founder of the crypto token Tron.
FTX is thought to have paid $135m for naming rights at the home arena of the Miami Heat [File: Jim Rassol/USA TODAY Sports via Reuters]
November 12: Reuters reports at least $1bn of customer funds have vanished from FTX. The exchange says it has detected unauthorised transactions. Blockchain analytics firms estimate outflows between $473m and $659m in “suspicious circumstances”.
November 13: Bahamas securities regulators launch a probe over the collapse of FTX, which has its base in the Caribbean nation.
November 15: Financial regulators in the Bahamas appoint liquidators to run FTX’s unit in the country.
November 16: FTX outlines a “severe liquidity crisis” in US bankruptcy filings, which show the group could have more than 1 million creditors.
A court filing shows FTX’s Bahamas unit, FTX Digital Markets, is seeking protection from creditors in the US under Chapter 15 of the US Bankruptcy Code.
Bankman-Fried is sued in a US court by investors alleging the company’s yield-bearing crypto accounts violated Florida law.
Liquidators for FTX Digital Markets “reject the validity” of FTX’s US bankruptcy proceedings.
Major crypto player Genesis Global Capital suspends customer redemptions in its lending business, citing the sudden failure of FTX.
November 17: The US House Financial Services Committee says it plans to hold a hearing in December to investigate the collapse of FTX.
November 30: Bankman-Fried says in an interview at the New York Times Dealbook Summit that “he didn’t ever try to commit fraud”.
December 12:Police arrest Bankman-Fried in the Bahamas, with the US expected to file for his extradition. US authorities decline to comment on potential charges, but the New York Times reports the charges include wire fraud, wire fraud conspiracy, securities fraud, securities fraud conspiracy and money laundering.
Sam Bankman-Fried’s arrest in the Bahamas on Monday marks the beginning of a new chapter in the FTX saga, one that will pit the former crypto billionaire against the Southern District of New York.
The indictment is expected to remain sealed until Tuesday morning. U.S. prosecutors haven’t commented, and neither the Attorney General of the Bahamas nor the Royal Bahamas Police Force would confirm the nature of the charges against Bankman-Fried.
The New York Times reported that the charges against Bankman-Fried included conspiracy to commit wire fraud and securities fraud, as well as standalone charges of securities fraud, wire fraud and money laundering.
The SEC has initiated a separate set of charges against Bankman-Fried, relating to “violations of our securities laws, which will be filed publicly tomorrow in the Southern District of New York,” enforcement director Gurbir Grewal said in a statement on Monday.
A spokesperson for the SEC declined further comment.
The charges could land Bankman-Fried in prison for decades, legal experts told CNBC. But before he ever serves time, U.S. prosecutors have to secure an extradition from the Bahamas back to New York.
An effort to extradite
“It is inconceivable to me that the Justice Department would have charged this case unless they were confident that they could extradite him,” Renato Mariotti, a former federal prosecutor, told CNBC.
Mariotti anticipates an extradition will take weeks to complete.
“The statement by the Bahamian government suggests that they’re going to cooperate,” Mariotti said.
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The U.S. and the Bahamas have had an extradition treaty in place since 1931, with the most recent iteration codified in 1990. Because Bankman-Fried hasn’t been convicted in the Bahamas yet, U.S. prosecutors had to secure an arrest warrant and provide sufficient evidence to the Bahamians that he had committed a crime.
Extradition is the first step in a process that could take years to finish. Given the magnitude of Bankman-Fried’s alleged crimes, prosecutors and regulators will be pursuing concurrent cases around the world.
A trial in the U.S. “may not occur for years,” Mariotti said.
“The more that they charge, the bigger that the case is, the more time they’re going to need to get in motion,” he said. “I would say late 2023 is the earliest a trial would occur.”
Prosecutors could argue that FTX breached its fiduciary duty by allegedly using customer funds to artificially stabilize the price of the company’s self-issued FTT coin, Mariotti said.
Intent is also a factor in fraud cases, and Bankman-Fried insists he didn’t know about potentially fraudulent activity. He told CNBC’s Andrew Ross Sorkin at the New York Times DealBook conference that he “didn’t knowingly commingle funds.”
“I didn’t ever try to commit fraud,” Bankman-Fried said.
In prepared testimony for the House Financial Services committee, new FTX CEO John Ray confirmed that commingling of funds had occurred between FTX and Alameda Research, Bankman-Fried’s hedge fund.
Other legal trouble
Beyond the criminal charges set to be unveiled Tuesday morning, Bankman-Fried is also facing civil action, which could be brought by the SEC, the Commodity Futures Trading Commission and state banking and securities regulators, said Richard Levin, who chairs the fintech and regulation practice at Nelson Mullins Riley & Scarborough.
The CFTC and lawmakers have begun their probes into FTX and Bankman-Fried, who told Sorkin he was down to his last $100,000.
Shortly after Bankman-Fried’s arrest, the SEC appeared to confirm that the agency would pursue a separate set of charges from the criminal indictment.
Lawmakers also expressed their satisfaction at Bankman-Fried’s arrest. Senator Sherrod Brown (D-Ohio), who chairs the Senate Committee on Banking, Housing, and Urban Affairs, applauded both the Justice Department and Bahamian law enforcement “for holding Sam Bankman-Fried accountable.”
Rep. Maxine Waters (D-Calif.), the chairwoman of the House Financial Services Committee, echoed that sentiment, but expressed disappointment that Bankman-Fried was arrested before his House testimony, which was scheduled for Tuesday.
“I am surprised to hear that Sam Bankman-Fried was arrested in the Bahamas at the direction of the United States Attorney,” Waters said in a statement.
“[The] American public deserves to hear directly from Mr. Bankman-Fried about the actions that’ve harmed over one million people,” Waters continued.
Bankman-Fried had also been invited to appear before the Senate prior to his arrest. That hearing will occur on Wednesday.
It’s unclear whether the SEC or the CFTC will take the lead in securing civil damages.
“The question of who would be taking the lead there, whether it be the SEC or CFTC, depends on whether or not there were securities involved,” Mariotti told CNBC.
SEC Chairman Gary Gensler, who met with Bankman-Fried and FTX executives earlier this year, has said publicly that “many crypto tokens are securities,” which would make his agency the primary regulator.
But many exchanges, including FTX, have crypto derivatives platforms that sell financial products like futures and options, which fall under the CFTC’s jurisdiction.
“For selling unregistered securities without a registration or an exemption, you could be looking at the Securities Exchange Commission suing for disgorgement — monetary penalties,” said Levin, who’s represented clients before both agencies.
Investors who have lost their savings aren’t waiting. Class-action suits have already been filed against FTX endorsers, like comedian Larry David and football superstar Tom Brady. One suit excoriated the celebrities for allegedly failing to do their “due diligence prior to marketing [FTX] to the public.”
FTX’s industry peers are also filing suit against Bankman-Fried. Failed lender BlockFi sued Bankman-Fried in November, seeking unnamed collateral that the FTX founder provided for the crypto lending firm.
FTX and Bankman-Fried had previously rescued BlockFi from insolvency in June, but when FTX failed, BlockFi was left with a similar liquidity problem and filed for bankruptcy protection in New Jersey.
Bankman-Fried has also been sued in Florida and California federal courts. He faces class-action suits in both states over “one of the great frauds in history,” a California court filing said.
The largest securities class-action settlement was for $7.2 billion in the Enron accounting fraud case, according to Stanford research. The possibility of a multibillion-dollar settlement would come on top of civil and criminal fines that Bankman-Fried faces.
A life behind bars
If the DOJ were able to secure a conviction, a judge would look to several factors to determine how long to sentence him.
Based on the size of the losses, if Bankman-Fried is convicted on any of the fraud charges, he could be behind bars for years — potentially for the rest of his life, said Braden Perry, a partner at Kennyhertz Perry who advises clients on anti-money laundering, compliance and enforcement issues.
But the length of any potential sentence is hard to predict, said Perry, who was previously a senior trial lawyer for the CFTC, FTX’s only official U.S. regulator.
Federal sentencing guidelines follow a numeric system to determine the maximum and minimum allowable sentence, but the system can be esoteric. The scale, or “offense level,” starts at one, and maxes out at 43.
A wire fraud conviction rates as a seven on the scale, with a minimum sentence ranging from zero to six months.
But mitigating factors and enhancements can alter that rating, Perry told CNBC.
“The dollar value of loss plays a significant role. Under the guidelines, any loss above $550 million adds 30 points to the base level offense,” Perry said. FTX customers have lost billions of dollars.
“Having 25 or more victims adds 6 points, [and] use of certain regulated markets adds 4,” Perry said.
That means Bankman-Fried could be facing life in federal prison, without the possibility of supervised release, if he’s convicted on just one of the offenses that prosecutors will reportedly pursue.
If convicted, his sentence could be reduced by mitigating factors.
“In practice, many white-collar defendants are sentenced to lesser sentences than what the guidelines dictate,” Perry said. Even in large fraud cases, that 30-point enhancement previously mentioned can be considered punitive.
By way of comparison, Stefan Qin, the Australian founder of a $90 million cryptocurrency hedge fund, was sentenced to more than seven years in prison after he pleaded guilty to one count of securities fraud.
Sam Bankman-Fried, the founder and former CEO of Bitcoin and cryptocurrency exchange FTX, has been arrested in the Bahamas by local authorities.
The arrest followed receipt of formal notification from the U.S. that it had filed criminal charges against SBF, per a statement from the Attorney General of the Bahamas. SBF’s extradition to the U.S. will likely be requested.
SBF has been on the news for a couple of years, but it wasn’t until recently that such coverage turned a dark corner. The Jane Street alumni turned crypto founder ultimately led his creations, FTX and Alameda Research, to insolvency as SBF’s severe mismanagement of users’ funds came to light. He then filed for Chapter 11 bankruptcy protection and resigned as CEO.
The disgraced entrepreneur then went on an unusual interview spree, talking about the companies and his version of the story to as many journalists willing to give him a stage. Notably, however, SBF would only deflect from answering the tougher questions, reaching a point where he said he “didn’t knowingly commingle users’ funds.”
Now, the story is set to take a new twist as prosecutors move to unseal the indictment on Tuesday morning. A source familiar with the matter told The New York Times that charges brought against SBF include wire fraud, wire fraud conspiracy, securities fraud, securities fraud conspiracy and money laundering.
Sam Bankman-Fried, the ex-CEO of defunct cryptocurrency company FTX, has been arrested in the Bahamas, authorities said Monday.
The office of the attorney general of the Bahamas said in an announcement that it will extradite Bankman-Fried to the United States, where he is wanted on unspecified criminal charges, as soon as a formal request is made.
“The Bahamas and United States have a shared interest in holding accountable all individuals associated with FTX who may have betrayed the public trust and broken the law,” Bahamian Prime Minister Philip Davis said in a statement.
Damian Williams, the U.S. attorney for the Southern District of New York, announced shortly after the arrest that his office expects to unseal its indictment involving Bankman-Fried on Tuesday morning.
Bankman-Fried, 30, served as the CEO of the massive cryptocurrency exchange FTX until last month, when the company suddenly imploded and filed for bankruptcy protection. Following complaints that he misused billions in customers’ money, multiple U.S. regulatory agencies launched investigations into his dealings in the largely unregulated cryptocurrency industry.
News of his arrest in the Bahamas comes the same day that new FTX CEO John J. Ray III, who also oversaw Enron’s bankruptcy in the early 2000s, gave a statement outlining his predecessor’s “unacceptable management practices.” Among them was a company “spending binge in late 2021 through 2022, during which approximately $5 billion was spent buying a myriad of businesses and investments, many of which may be worth only a fraction of what was paid for them.
The campaign finance watchdog Citizens for Responsibility and Ethics in Washington also recently filed a complaint with the Federal Election Commission accusing Bankman-Fried of breaking federal laws by using dark money groups to hide millions in campaign donations to Republicans in the lead-up to the 2022 primaries.
John Ray, chief executive officer of FTX Cryptocurrency Derivatives Exchange, arrives at bankruptcy court in Wilmington, Delaware, US, on Tuesday, Nov. 22, 2022.
Eric Lee | Bloomberg | Getty Images
Attorneys in the Bahamas filed an emergency motion on Friday asking a Delaware bankruptcy judge to compel U.S. leaders of failed crypto firm FTX to give them access to databases as part of the proceedings.
The emergency motion claims that despite “many attempts to obtain access,” FTX employees and counsel have stymied Bahamian regulators in their effort to get critical financial information located in Amazon Web Services and Google Cloud Portal databases.
The lawyers, working on behalf of the Securities Commission of the Bahamas, said the U.S. bankruptcy proceedings will “suffer no harm or hardship if this relief is granted.” They’re seeking data on FTX international customers that is stored on AWS servers, including “wallet addresses, customer balances, deposit and withdrawal records, trades, and accounting data.” Google’s technology served as an analytics platform for FTX International’s data.
“While the Joint Provisional Liquidators are happy to engage in dialogue with the U.S. Debtors, their refusal to promptly restore access has frustrated the ability of the Joint Provisional Liquidators to carry out their duties under Bahamian law and placed FTX Digital’s assets at risk of dissipation,” the filing read.
FTX filed for bankruptcy protection last month after a liquidity crunch at the crypto exchange, which was intermingling assets with sister hedge fund Alameda Research. FTX founder Sam Bankman-Fried, who had an estimated net worth of $16 billion before the collapse, will appear before U.S. lawmakers next week.
WARWICK, R.I. — One tarnished silver coin at a time, the ground is yielding new evidence that in the late 1600s, one of the world’s most ruthless pirates wandered the American colonies with impunity.
Newly surfaced documents also strengthen the case that English buccaneer Henry Every — the target of the first worldwide manhunt — hid out in New England before sailing for Ireland and vanishing into the wind.
“At this point, the amount of evidence is overwhelming and indisputable,” historian and metal detectorist Jim Bailey, who’s devoted years to solving the mystery, told The Associated Press. “Every was undoubtedly on the run in the colonies.”
In 2014, after unearthing an unusual coin engraved with an Arabic inscription at a pick-your-own-fruit orchard in Middletown, Rhode Island, Bailey began retracing Every’s steps.
Research confirmed that the exotic coin was minted in 1693 in Yemen. Bailey then discovered that it was consistent with millions of dollars’ worth of coins and other valuables seized by Every and his men in their brazen Sept. 7, 1695, sacking of the Ganj-i-Sawai, an armed royal vessel owned by Indian emperor Aurangzeb.
Historical accounts say Every’s band tortured and killed passengers aboard the Indian ship and raped many of the women before escaping to the Bahamas, a haven for pirates. But word quickly spread of their crimes, and English King William III — under enormous pressure from a scandalized India and the influential East India Company trading giant — put a large bounty on their heads.
Detectorists and archaeologists have since located 26 similar coins stretching from Maine to the Carolinas. All but three coins turned up in New England, and none can be dated later than when the Indian ship was captured.
“When I first heard about it, I thought, ‘Wait a minute, this can’t be true,’” said Steve Album, a rare coin specialist based in Santa Rosa, California, who helped identify all of the silver Arabic coins found in New England.
“But these coins have been found legitimately and in a few instances archaeologically, and every single one predates the sacking of the ship,” said Album, who has lived in Iran and has traveled widely in the Middle East.
Detectorists have also unearthed a gold nugget weighing 3 grams (a tenth of an ounce) — slightly heavier than a U.S. penny — from a potato field perched on a hilltop in seaside Little Compton, Rhode Island.
There’s no documented evidence that naturally occurring gold has ever been found in the state. Bailey and other experts believe that the nugget likely originated somewhere along Africa’s Gold Coast, a center for the slave trade in the late 17th and early 18th centuries. Adding to the intrigue, two silver Arabic coins were recovered not far from the nugget, and Every is known to have seized a considerable amount of gold while sailing off the coast of West Africa.
The latest evidence putting Every on American soil isn’t just metallic — it includes paper and pixels.
Bailey had already found records showing that the Sea Flower, a ship used by Every and his men after they ditched the vessel they’d used in their murderous raid, arrived in 1696 in Newport, Rhode Island. He’s since surfaced documents that show that the pirate captain was accompanied by three Rhode Islanders he took aboard from another pirate vessel when he fled India. All three came ashore with Every in the Bahamas on March 30, 1696, and Bailey said that they essentially served as getaway drivers in exchange for plunder.
Captured pirates William Phillips and Edward Savill testified on Aug. 27, 1696, that one of two ships that left the Bahamas went to Virginia and New England before reaching Ireland. Critically, Bailey said, the records clarify a muddy timeline that long has been misinterpreted by historians to suggest Every lingered two months on the Caribbean island — something he’d never have done as a fugitive.
“There’s no way he stayed in the Bahamas to sit on the beach and work on his tan while waiting to be captured,” Bailey said. “Indeed, Every was in New England for over a month weighing his options for starting his life anew in the colonies or going back home to England.”
Every’s exploits have inspired Steven Johnson’s book “Enemy of All Mankind,” and the final installment of PlayStation’s popular “Uncharted” video game franchise. Earlier this year, Sony Pictures released a movie adaptation starring Tom Holland, Mark Wahlberg and Antonio Banderas.
Bailey’s next challenge: figuring out what happened to Every after the trail ran cold following his arrival in Ireland on June 20, 1696. It’s the mystery’s elusive final chapter — one he hopes to detail in a forthcoming book about the cold case.
“We’re chasing down the lost history behind one of the greatest crimes of the 17th century,” he said.
FTX CEO Sam Bankman-Fried attends a press conference at the FTX Arena in downtown Miami on Friday, June 4, 2021.
Matias J. Ocner | Miami Herald | Tribune News Service | Getty Images
Sam Bankman-Fried, the disgraced former CEO of FTX — the bankrupt cryptocurrency exchange that was worth $32 billion a few weeks ago — has a real knack for self-promotional PR. For years, he cast himself in the likeness of a young boy genius turned business titan, capable of miraculously growing his crypto empire as other players got wiped out. Everyone from Silicon Valley’s top venture capitalists to A-list celebrities bought the act.
But during Bankman-Fried’s press junket of the last few weeks, the onetime wunderkind has spun a new narrative – one in which he was simply an inexperienced and novice businessman who was out of his depth, didn’t know what he was doing, and crucially, didn’t know what was happening at the businesses he founded.
It is quite the departure from the image he had carefully cultivated since launching his first crypto firm in 2017 – and according to former federal prosecutors, trial attorneys and legal experts speaking to CNBC, it recalls a classic legal defense dubbed the “bad businessman strategy.”
At least $8 billion in customer funds are missing, reportedly used to backstop billions in losses at Alameda Research, the hedge fund he also founded. Both of his companies are now bankrupt with billions of dollars worth of debt on the books. The CEO tapped to take over, John Ray III, said that “in his 40 years of legal and restructuring experience,” he had never seen “such a complete failure of corporate controls and such a complete absence of trustworthy financial information as occurred here.” This is the same Ray who presided over Enron’s liquidation in the 2000s.
In America, it is not a crime to be a lousy or careless CEO with poor judgement. During his recent press tour from a remote location in the Bahamas, Bankman-Fried really leaned into his own ineptitude, largely blaming FTX’s collapse on poor risk management.
At least a dozen times in a conversation with Andrew Ross Sorkin, he appeared to deflect blame to Caroline Ellison, his counterpart (and one-time girlfriend) at Alameda. He says didn’t know how extremely leveraged Alameda was, and that he just didn’t know about a lot of things going on at his vast empire.
Bankman-Fried admitted he had a “bad month,” but denied committing fraud at his crypto exchange.
Fraud is the kind of criminal charge that can put you behind bars for life. With Bankman-Fried, the question is whether he misled FTX customers to believe their money was available, and not being used as collateral for loans or for other purposes, according to Renato Mariotti, a former federal prosecutor and trial attorney who has represented clients in derivative-related claims and securities class actions.
“It sure looks like there’s a chargeable fraud case here,” said Mariotti. “If I represented Mr. Bankman-Fried, I would tell him he should be very concerned about prison time. That it should be an overriding concern for him.”
But for the moment, Bankman-Fried appears unconcerned with his personal legal exposure. When Sorkin asked him if he was concerned about criminal liability, he demurred.
“I don’t think that — obviously, I don’t personally think that I have — I think the real answer is it’s not — it sounds weird to say it, but I think the real answer is it’s not what I’m focusing on,” Bankman-Fried told Sorkin. “It’s — there’s going to be a time and a place for me to think about myself and my own future. But I don’t think this is it.”
Comments such as these, paired with the lack of apparent action by regulators or authorities, have helped inspire fury among many in the industry – not just those who lost their money. The spectacular collapse of FTX and SBF blindsided investors, customers, venture capitalists and Wall Street alike.
Bankman-Fried did not respond to a request for comment. Representatives for his former law firm, Paul, Weiss, did not immediately respond to comment. Semafor reported earlier that Bankman-Fried’s new attorney was Greg Joseph, a partner at Joseph Hage Aaronson.
Both of Bankman-Fried’s parents are highly respected Stanford Law School professors. Semafor also reported that another Stanford Law professor, David Mills, was advising Bankman-Fried.
Mills, Joseph and Bankman-Fried’s parents did not immediately respond to requests for comment.
Bankman-Fried could face a host of potential charges – civil and criminal – as well as private lawsuits from millions of FTX creditors, legal experts told CNBC.
For now, this is all purely hypothetical. Bankman-Fried has not been charged, tried, nor convicted of any crime yet.
Richard Levin is a partner at Nelson Mullins Riley & Scarborough, where he chairs the fintech and regulation practice. He’s been involved in the fintech industry since the early 1990s, and has represented clients before the Securities and Exchange Commission, Commodity Futures Trading Commission and Congress. All three of those entities have begun probing Bankman-Fried.
There are three different, possibly simultaneous legal threats that Bankman-Fried faces in the United States alone, Levin told CNBC.
First is criminal action from the U.S. Department of Justice, for potential “criminal violations of securities laws, bank fraud laws, and wire fraud laws,” Levin said.
A spokesperson for the U.S. Attorney’s Office for the Southern District of New York declined to comment.
Securing a conviction is always challenging in a criminal case.
Mariotti, the former federal prosecutor is intricately familiar with how the government would build a case. He told CNBC, “prosecutors would have to prove beyond a reasonable doubt that Bankman-Fried or his associates committed criminal fraud.”
“The argument would be that Alameda was tricking these people into getting their money so they could use it to prop up a different business,” Mariotti said.
“If you’re a hedge fund and you’re accepting customer funds, you actually have a fiduciary duty [to the customer],” Mariotti said.
Prosecutors could argue that FTX breached that fiduciary duty by allegedly using customer funds to artificially stabilize the price of FTX’s own FTT coin, Mariotti said.
But intent is also a factor in fraud cases, and Bankman-Fried insists he didn’t know about potentially fraudulent activity. He told Sorkin that he “didn’t knowingly commingle funds.”
“I didn’t ever try to commit fraud,” Bankman-Fried said.
Beyond criminal charges, Bankman-Fried could also be facing civil enforcement action. “That could be brought by the Securities Exchange Commission, and the Commodity Futures Trading Commission, and by state banking and securities regulators,” Levin continued.
“On a third level, there’s also plenty of class actions that can be brought, so there are multiple levels of potential exposure for […] the executives involved with FTX,” Levin concluded.
The Department of Justice is most likely to pursue criminal charges in the U.S. The Wall Street Journal reported that the DOJ and the SEC were both probing FTX’s collapse, and were in close contact with each other.
That kind of cooperation allows for criminal and civil probes to proceed simultaneously, and allows regulators and law enforcement to gather information more effectively.
But it isn’t clear whether the SEC or the CFTC will take the lead in securing civil damages.
An SEC spokesperson said the agency does not comment on the existence or nonexistence of a possible investigation. The CFTC did not immediately respond to a request for comment.
“The question of who would be taking the lead there, whether it be the SEC or CFTC, depends on whether or not there were securities involved,” Mariotti, the former federal prosecutor, told CNBC.
SEC Chairman Gary Gensler, who met with Bankman-Fried and FTX executives in spring 2022, has said publicly that “many crypto tokens are securities,” which would make his agency the primary regulator. But many exchanges, including FTX, have crypto derivatives platforms that sell financial products like futures and options, which fall under the CFTC’s jurisdiction.
“For selling unregistered securities without a registration or an exemption, you could be looking at the Securities Exchange Commission suing for disgorgement — monetary penalties,” said Levin, who’s represented clients before both agencies.
“They can also sue, possibly, claiming that FTX was operating an unregistered securities market,” Levin said.
Then there are the overseas regulators that oversaw any of the myriad FTX subsidiaries.
The Securities Commission of The Bahamas believes it has jurisdiction, and went as far as to file a separate case in New York bankruptcy court. That case has since been folded into FTX’s main bankruptcy protection proceedings, but Bahamian regulators continue to investigate FTX’s activities.
Court filings allege that Bahamian regulators have moved customer digital assets from FTX custody into their own. Bahamian regulators insist that they’re proceeding by the book, under the country’s groundbreaking crypto regulations — unlike many nations, the Bahamas has a robust legal framework for digital assets.
But crypto investors aren’t sold on their competence.
“The Bahamas clearly lack the institutional infrastructure to tackle a fraud this complex and have been completely derelict in their duty,” Castle Island Ventures partner Nic Carter told CNBC. (Carter was not an FTX investor, and told CNBC that his fund passed on early FTX rounds.)
“There is no question of standing. U.S. courts have obvious access points here and numerous parts of Sam’s empire touched the U.S. Every day the U.S. leaves this in the hands of the Bahamas is a lost opportunity,” he continued.
Investors who have lost their savings aren’t waiting. Class-action suits have already been filed against FTX endorsers, like comedian Larry David and football superstar Tom Brady. One suit excoriated the celebrity endorsers for allegedly failing to do their “due diligence prior to marketing [FTX] to the public.”
FTX’s industry peers are also filing suit against Bankman-Fried. BlockFi sued Bankman-Fried in November, seeking unnamed collateral that the former billionaire provided for the crypto lending firm.
FTX and Bankman-Fried had previously rescued BlockFi from insolvency in June, but when FTX failed, BlockFi was left with a similar liquidity problem and filed for bankruptcy protection in New Jersey.
Bankman-Fried has also been sued in Florida and California federal courts. He faces class-action suits in both states over “one of the great frauds in history,” a California court filing said.
The largest securities class-action settlement was for $7.2 billion in the Enron accounting fraud case, according to Stanford research. The possibility of a multibillion-dollar settlement would come on top of civil and criminal fines that Bankman-Fried faces.
But the onus should be on the U.S. government to pursue Bankman-Fried, Carter told CNBC, not on private investors or overseas regulators.
“The U.S. isn’t shy about using foreign proxies to go after Assange — why in this case have they suddenly found their restraint?”
Wire fraud is the most likely criminal charge Bankman-Fried would face. If the DOJ were able to secure a conviction, a judge would look to several factors to determine how long to sentence him.
Braden Perry was once a senior trial lawyer for the CFTC, FTX’s only official U.S. regulator. He’s now a partner at Kennyhertz Perry, where he advises clients on anti-money laundering, compliance and enforcement issues.
Based on the size of the losses, if Bankman-Fried is convicted of fraud or other charges, he could be behind bars for years — potentially for the rest of his life, Perry said. But the length of any potential sentence is hard to predict.
“In the federal system, each crime always has a starting point,” Perry told CNBC.
Federal sentencing guidelines follow a numeric system to determine the maximum and minimum allowable sentence, but the system can be esoteric. The scale, or “offense level,” starts at one, and maxes out at 43.
A wire fraud conviction rates as a seven on the scale, with a minimum sentence ranging from zero to six months.
But mitigating factors and enhancements can alter that rating, Perry told CNBC.
“The dollar value of loss plays a significant role. Under the guidelines, any loss above $550 million adds 30 points to the base level offense,” Perry said. FTX customers have lost billions.
“Having 25 or more victims adds 6 points, [and] use of certain regulated markets adds 4,” Perry continued.
In this hypothetical scenario, Bankman-Fried would max out the scale at 43, based on those enhancements. That means Bankman-Fried could be facing life in federal prison, without the possibility of supervised release, if he’s convicted on a single wire fraud offense.
But that sentence can be reduced by mitigating factors – circumstances that would lessen the severity of any alleged crimes.
“In practice, many white-collar defendants are sentenced to lesser sentences than what the guidelines dictate,” Perry told CNBC, Even in large fraud cases, that 30-point enhancement previously mentioned can be considered punitive.
Bankman-Fried could also face massive civil fines. Bankman-Fried was once a multibillionaire, but claimed he was down to his last $100,000 in a conversation with CNBC’s Sorkin at the DealBook Summit last week.
“Depending on what is discovered as part of the investigations by law enforcement and the civil authorities, you could be looking at both heavy monetary penalties and potential incarceration for decades,” Levin told CNBC.
In the most famous fraud case in recent years, Bernie Madoff was arrested within 24 hours of federal authorities learning of his multibillion-dollar Ponzi scheme. But Madoff was in New York and admitted to his crime on the spot.
The FTX founder is in the Bahamas and hasn’t admitted wrongdoing. Short of a voluntary return, any efforts to apprehend him would require extradition.
With hundreds of subsidiaries and bank accounts, and thousands of creditors, it’ll take prosecutors and regulators time to work through everything.
Similar cases “took years to put together,” said Mariotti. At FTX, where record keeping was spotty at best, collecting enough data to prosecute could be much harder. Expenses were reportedly handled through messaging software, for example, making it difficult to pinpoint how and when money flowed out for legitimate expenses.
In Enron’s bankruptcy, senior executives weren’t charged until nearly three years after the company went under. That kind of timeline infuriates some in the crypto community.
“The fact that Sam is still walking free and unencumbered, presumably able to cover his tracks and destroy evidence, is a travesty,” said Carter.
But just because law enforcement is tight-lipped, that doesn’t mean they’re standing down.
“People should not jump to the conclusion that something is not happening just because it has not been publicly disclosed,” Levin told CNBC.
Could he just disappear?
“That’s always a possibility with the money that someone has,” Perry said, although Bankman-Fried claims he’s down to one working credit card. But Perry doesn’t think it’s likely. “I believe that there has been likely some negotiation with his attorneys, and the prosecutors and other regulators that are looking into this, to ensure them that when the time comes […] he’s not fleeing somewhere,” Perry told CNBC.
In the meantime, Bankman-Fried won’t be resting easy as he waits for the hammer to drop. Rep. Maxine Waters extended a Twitter invitation for him to appear before a Dec. 13 hearing.
Bankman-Fried responded on Twitter, telling Waters that if he understands what happened at FTX by then, he’d appear.
Correction: Caroline Ellison is Bankman-Fried’s counterpart at Alameda. An earlier version misspelled her name.
NASSAU, Bahamas — All it takes is one shot to settle the nerves, to create momentum or restore confidence, or in the case of Justin Thomas, to stop the bleeding.
Thomas has won the PGA Championship twice, and both times he looked back to a moment before the final round that was crucial to winning.
It’s like that for other major champions, too.
In a series of interviews, they shared the signature shot of the major they won, along with a shot that was pleasing because of the subtle quality or the circumstances.
MASTERS
Scottie Scheffler was so nervous about his three-shot lead going into Sunday at Augusta National that he was in tears that morning. Two holes into the final round, the lead was down to one and Scheffler was in trouble again on the third hole.
The memorable shot of what became a runaway victory was chipping in from short of the third green for birdie. Smith made bogey for a two-shot swing, the lead was back to three and no one got closer the rest of the way.
“The timing of it was great,” Scheffler said with a laugh. “I was trying to get it up there to have a putt. At worse, I’d have a good look at par. And it happened to go in.”
But it was another wedge a few holes earlier that really stood out. The one place to avoid with the traditional Sunday pin on No. 1 is long. Scheffler was in the trees and hit a good punch shot that rolled just over the back.
“It’s one of the hardest pitches on the course,” he said. “You have this shelf. You’re down below the green. Everything runs away from you. The odds of keeping it on that top shelf? I don’t know if you can tell on TV but it goes up, down, left to right. It’s such a hard shot. I hit it so well it looked like it wasn’t hard.
“That was the chip that got me settled in that all right, I can do this.”
PGA CHAMPIONSHIP
Thomas was in a three-hole playoff at Southern Hills with Will Zalatoris, both opening with birdie on the par-5 13th. Next was the reachable par-4 17th, with a creek to the right that meanders in front of the green.
“I hit it in the left bunker in regulation, so I knew that had to be my miss,” he said. “I aimed at the left bunker, cut it to the second one, and if the wind wants to take that up the gap, great. As soon as it came off, it was a perfect shot.”
It found the green for a two-putt birdie and one-shot lead, and he won with a par on 18.
The meaningful shot cleaned up a mess from the day before.
Thomas was sliding from contention with each of the five bogeys he made through 15 holes, one of them on the par-5 13th. The 16th hole looked like another when he drove into the rough, had to chip out and hit a pedestrian wedge to 25 feet.
“I was leaking oil, playing bad. It was really rough,” Thomas said. “I hit a poor wedge to 25 or 30 feet and made that for par, and I birdied 17. I bogey that hole and don’t birdie 17, it’s over.”
U.S. OPEN
“The one thing I’ve been really struggling with this year is fairway bunker play,” Matt Fitzpatrick said after winning at Brookline.
That’s what led to his first major. He had a one-shot lead when he drove into the bunker left of the 18th fairway. With the steep lip, it looked like his safest option was short of the green. He hit a “squeezy fade” from 156 yards with a 9-iron to 18 feet for par.
“It was just kind of natural ability took over and just played the shot that was at hand, if I was a junior trying to hit it close,” Fitzpatrick shot.
Three holes earlier, he hit a 5-iron out of the rough on the 15th that led to birdie. But it was another birdie, even more unlikely, that stands out to him.
“The putt on 13,” he said. “It was 50 feet. For whatever reason, I genuinely felt good over the putt. I felt like I had a chance, and you don’t often get that. I’ve had it multiple times over 10-footers and 20-footers. That one … I felt good over it.”
As for the timing? He had missed a 6-foot par putt on No. 10. He three-putted from 15 feet on the par-3 11th, falling two shots behind. And then he dropped the big one.
“It just changed the momentum for me,” he said.
BRITISH OPEN
Imagine leading the 150th Open at St. Andrews by one shot on the 17th hole, 40 yards away with the notorious Road Hole bunker between you and the pin.
“It was pretty daunting,” Cameron Smith said. “I hit a great putt. I figured somewhere on the putting surface I’d have a good look at par.”
The danger was losing pace if it started too close to the edge and funneling into the pot bunker. The pace was perfect and settled 10 feet away. Smith made everything on Sunday, and that par putt was no exception.
“I was trying to hit it to a certain spot on the green and trying not to think of the big bunker that was staring me right in the face,” he said. “That’s probably the one shot on the back nine where if it goes pear-shaped, we’re not talking.”
He made five straight birdies in that closing 64. But when asked for a meaningful shot, he thought back to the second round, a 3-wood into the par-5 14th for an eagle.
“My favorite shot of the week,” he said. “I had to take a little off a 3-wood and hold it off the breeze, and it turned out perfect.”
It told him the long game was in top form. The short game never seems to leave him.
———
AP golf: https://apnews.com/hub/golf and https://twitter.com/AP—Sports
The rise and fall of FTX and Sam Bankman-Fried revealed holes in the crypto space that industry peers, the media, and government officials either chose to overlook or refused to question further.
