Partner Richard Cannon comments on legal developments in the Sam Bankman-Fried case in the cryptocurrency press

Although this is a predictable next step, Bankman-Fried’s arrest represents a remarkable fall from grace. In taking this action, the US has asserted its primacy in the FTX saga in the old fashioned way they know best.

The charges relate to wire fraud, securities fraud and money laundering, and the SEC are themselves reportedly ready with charges of their own.

Bankman-Fried’s arrest suggests that authorities have found evidence of serious criminal wrongdoing within FTX.

In time, details will undoubtedly emerge regarding the period the alleged misconduct covers, as well as whether others are implicated.

Sam Bankman-Fried’s arrest represents a major development in the FTX collapse, and the actions of US authorities going forward will be closely watched by the entire cryptocurrency industry.

The extradition proceedings in the Bahamas have been adjourned until February. The next step for Sam Bankman-Fried will be to decide whether he intends to contest extradition to the US.

All of the individual charges Bankman-Fried faces are serious. The five wire fraud and money laundering charges each carry maximum sentences of 20 years, and the other three charges each carry maximum sentences of five years. In total, Sam Bankman-Fried now faces charges that carry a combined maximum sentence of 115 years.

It is difficult to say at this stage what the likely outcome will be, but the stakes are very high indeed. Sentences in major fraud cases can vary, with Bernie Madoff receiving a 150 year sentence in 2009, whilst in the Enron case a few years earlier the sentences handed out to the prime movers were much lower.