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Investing.com – Sam Bankman-Fried (SBF), considered the mastermind of one of the biggest frauds in American history, was due to be questioned by Congress in a hearing this week. Only a few hours before this date, he was arrested at his home in the Bahamas, which explains why the hearing did not take place.
Although it was indicated in advance that SBF would not personally participate in the audition, he had agreed to a video link. This begs the question, why did the authorities act like this?
Congressman Warren Davidson, who also serves on the Financial Services Committee (FSC), has only one explanation. By arresting him, the supervisory authorities wanted to prevent the hearing from taking place.
In the past, it has been repeatedly discussed that SBF has a close relationship with SEC Chairman Gary Gensler. Several recorded personal meetings took place.
It was so striking that it was even brought up in the SEC’s lawsuit against the company. Why was SBF coming and going at the SEC, when other big players in the crypto world were being shut down from the authority?
Did personal relationships play a role? For example the fact that Garry Gansler was a professor at MIT when Glenn Ellison headed the MIT Institute of Economics? Glenn Ellison is the father of Caroline Ellison, who was CEO of Alameda Research, a subsidiary of FTX, and who had a relationship with SBF in the meantime.
The Dailymail reported a 45-minute zoom video in which SBF spoke with Gary Gensler about setting up a new cryptocurrency exchange. Which gives the impression that the chairman of the SEC was SBF’s personal adviser.
All of this might have prompted regulators to pre-empt Congressional questioning by shutting down SBF. Warren Davidson is convinced of this, because Gensler would have had no control over the questions posed by Congress and therefore could not have predicted what SBF was going to say. Davidson explains thus:
“The best theory I have is that the SEC and other regulators didn’t want SBF to give their version of ‘So what were you doing with Gary Gensler at the Securities and Exchange Commission, in all those meetings and interactions that you had with the regulators?
He would have presented his own version of the facts. Regulators, the SEC, Gensler and others would not have been able to screen the questions. They wouldn’t have known where they would have led. I guess that played a part in the timing of the arrest.”
Attorney John Deaton called it “a very interesting prospect from a sitting member of Congress who sits on the FSC.”
by Marco Oehrl