• 16 July, 2024
News

FTX Founder Sam Bankman-Fried, Arrested in the Bahamas

Sam Bankman-Fried, the founder of FTX, was arrested in the Bahamas at the request of the US government. The arrest comes just a day before the disgraced former FTX CEO was scheduled to testify before the US Congress hearing, where he was expected to testify under oath on how his crypto exchange crumbled overnight.

The arrest came after the US filed criminal charges against Bankman-Fried, according to the statement, and the country expects the US to request that Bankman-Fried be extradited from The Bahamas soon.

FTX, the crypto exchange, which was founded in 2019 and is based in the Bahamas, declared bankruptcy on November 11 after struggling to raise funds to avoid collapse as traders rushed to withdraw $6 billion from the platform in just 72 hours. It has since been revealed that Bankman-Fried secretly used $10 billion in customer funds to support his trading business.

SBF was arrested for “various financial offences against US laws, which are also offences against Commonwealth of The Bahamas laws.” According to the New York Times, the charges could include wire fraud, securities fraud, money laundering, and related conspiracy charges.

According to Bahamian Prime Minister Philip Davis, both countries have a “shared interest” in holding accountable all individuals associated with FTX who may have betrayed the public trust and broken the law.

The US Attorney’s Office for the Southern District of New York confirmed in a tweet that prosecutors in the United States had indicted Bankman-Fried, though the indictment remains sealed.

According to a statement from Enforcement Director Gurbir Grewal, the U.S. Securities and Exchange Commission also plans to bring charges.

Bankman-Fried was arrested shortly after 6:00 p.m. Monday (2300 GMT) at his apartment complex, the Albany, in the Bahamas, and will appear in magistrate court on Tuesday, according to Bahamian police. The Bahamas Attorney General’s Office stated that he would likely be extradited to the United States.

In court filings and prepared Congressional testimony, FTX’s new CEO, John J. Ray III, stated that he had never seen anything quite like the corporate governance and documentation failures that he found at FTX.

Among other things, he discovered the heavily commingled customer and corporate assets, the absence of reliable financial statements, and the “use of computer infrastructure” that gave senior people at the company access to customer assets. In his prepared remarks, published earlier Monday, he stated that his new team had managed to secure about $1 billion of company assets to date.

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