Sam Bankman-Fried, FTX’s founder, arrested in the Bahamas
Sam Bankman-Fried, the founding father of failed crypto trade FTX, was arrested within the Bahamas on Monday after U.S. prosecutors filed legal fees towards him, in keeping with an announcement from the federal government of the Bahamas.
The Southern District of New York, which is investigating Bankman-Fried and the collapse of FTX and its sister buying and selling agency Alameda, confirmed his arrest on Twitter.
“Earlier this evening, Bahamian authorities arrested Samuel Bankman-Fried at the request of the U.S. government, based on a sealed indictment filed by the SDNY,” U.S. lawyer Damian Williams mentioned in an announcement. “We expect to move to unseal the indictment in the morning and will have more to say at that time.”
A consultant for Bankman-Fried’s authorized workforce did not instantly reply to CNN’s request for remark.
It’s unclear what fees await Bankman-Fried, the 30-year-old crypto superstar who grew to become a pariah in a single day final month as his firm suffered a liquidity disaster and filed for chapter, leaving no less than one million depositors unable to entry their funds.
Bankman-Fried has since sought to forged himself as a considerably hapless chief government who bought out over his skis, whereas denying accusations that he defrauded FTX’s prospects.
“I didn’t knowingly commit fraud,” he instructed the BBC over the weekend. “I didn’t want any of this to happen. I was certainly not nearly as competent as I thought I was.”
Bankman-Fried was scheduled Tuesday to seem just about earlier than the U.S. House Financial Services Committee, which is demanding solutions about how the corporate got here crashing down, ricocheting all through the digital asset ecosystem. Several crypto firms have halted operations, freezing buyer accounts and in some instances submitting for chapter themselves due to their publicity to FTX.
Also set to testify Tuesday was FTX’s new CEO, John J. Ray III, who took over for Bankman-Fried on November 11 and is tasked with shepherding it by the chapter course of.
Ray has thus far painted an image of a crypto empire with just about no company controls and a surprising lack of economic and different record-keeping.
“The scope of the investigation underway is enormous,” Ray mentioned in ready remarks launched Monday forward of his testimony.
While the probe is not accomplished, Ray mentioned, FTX’s collapse seems to stem from the focus of energy “in the hands of a very small group of grossly inexperienced and unsophisticated individuals” who did not implement just about any company controls.
Ray additionally states as undeniable fact that “customer assets from FTX.com were commingled with assets from the Alameda trading platform.” That’s a key difficulty for investigators, as FTX and Alameda had been, on paper, separate entities.
Bankman-Fried has denied knowingly commingling funds and sought to distance himself from the day-to-day administration of Alameda, which made plenty of high-risk buying and selling methods equivalent to arbitrage and “yield farming,” aka investing in digital tokens that pay interest-rate-like rewards, in keeping with reporting from The Wall Street Journal.
“I was frankly surprised by how big Alameda’s position was,” Bankman-Fried mentioned on the New York Times’ DealBook Summit late final month.
