Sam Bankman-Fried, Crypto Boss Who Went Bankrupt, Arrested In The Bahamas

The 30-year-old entrepreneur created one of many world’s largest cryptocurrency exchanges. (File)

Sam Bankman-Fried, who based and led FTX till a liquidity crunch pressured the cryptocurrency change to declare chapter final month, was arrested on Monday in The Bahamas after being criminally charged by US prosecutors.
It marks a shocking fall from grace for the 30-year-old entrepreneur who rode a cryptocurrency increase to create one of many world’s largest cryptocurrency exchanges and a internet value that Forbes pegged a yr in the past at $26.5 billion.

The change, launched in 2019 and based mostly in The Bahamas, filed for chapter Nov. 11 after it struggled to boost cash to stave off collapse as merchants rushed to withdraw $6 billion from the platform in simply 72 hours.

The lawyer common’s workplace for The Bahamas mentioned it proceeded with the arrest after receiving formal affirmation of fees in opposition to Bankman-Fried, including it expects he can be extradited to the USA.

A press release from The Bahamas Police mentioned Bankman-Fried had been arrested shortly after 6:00 pm Monday (2300 GMT) at his condo advanced, positioned in Albany, Nassau, in The Bahamas.

“He was arrested reference to numerous Monetary Offences in opposition to legal guidelines of the USA, that are additionally offences in opposition to legal guidelines of the Commonwealth of The Bahamas,” the assertion mentioned, including he was taken into custody with out incident and can seem in Nassau’s Justice of the Peace Courtroom on Tuesday.

A spokesman for the U.S. Legal professional’s workplace in Manhattan confirmed Bankman-Fried had been arrested in The Bahamas however declined to touch upon the fees.

“Earlier this night, Bahamian authorities arrested Samuel Bankman-Fried on the request of the U.S. Authorities, based mostly on a sealed indictment filed by the USA Legal professional’s Workplace for the Southern District of New York,” United States prosecutor Damian Williams mentioned in an announcement. “We count on to maneuver to unseal the indictment within the morning and may have extra to say at the moment.”

Mark Cohen, a lawyer for Bankman-Fried, didn’t instantly reply to a request for remark.

Bankman-Fried’s indictment by US authorities comes because the Division of Justice is contemplating fees in opposition to a far greater participant within the crypto world, industry-leading change Binance.

Reuters reported Monday that some Justice Division prosecutors consider they’ve gathered ample proof of their long-running investigation of Binance to cost the corporate and a few high executives. A Binance spokesperson advised Reuters in relation to the story: “We haven’t any perception into the interior workings of the US Justice Division, nor would it not be applicable for us to remark if we did.”

Binance is underneath investigation for attainable money-laundering and sanctions violations, Reuters has reported. Others within the division have argued for taking time to evaluation extra proof, 4 folks acquainted with the matter advised Reuters.

The arrest additionally got here a day forward of Bankman-Fried’s scheduled look earlier than U.S. lawmakers on Tuesday, the place he was planning to present testimony through a video hyperlink.

The U.S. Home Monetary Providers Committee was scheduled to listen to from Bankman-Fried and present FTX CEO John Ray throughout the first in a collection of hearings to look at the collapse of FTX starting at 10 a.m. ET (1500 GMT).

INVESTIGATIONS

FTX’s liquidity crunch got here after Bankman-Fried secretly moved $10 billion of FTX buyer funds to his proprietary buying and selling agency, Alameda Analysis, Reuters reported, citing two folks acquainted with the matter. At the very least $1 billion in buyer funds had vanished, the folks mentioned.

Bankman-Fried advised Reuters the corporate didn’t “secretly switch” however reasonably misinterpret its “complicated inside labeling.” Requested concerning the lacking funds, he responded: “???”

In a collection of interviews and public appearances in late November and December, Bankman-Fried acknowledged danger administration failures however sought to distance himself from accusations of fraud, saying he by no means knowingly commingled buyer funds on FTX with funds at Alameda.

“I did not ever attempt to commit fraud,” Bankman-Fried mentioned in a Nov. 30 interview on the New York Occasions’ Dealbook Summit, including he would not personally suppose he has any prison legal responsibility.

Bankman-Fried resigned as FTX’s chief govt officer the identical day because the chapter submitting.

The US Legal professional’s Workplace in Manhattan, led by veteran securities fraud prosecutor Williams, in mid-November started investigating how FTX dealt with buyer funds, a supply with information of the probe advised Reuters.

The Securities and Trade Fee and Commodity Futures Buying and selling Fee additionally opened probes.

U.S. crypto traders additionally sued Bankman-Fried, alleging he and a slew of celebrities who promoted FTX engaged in misleading practices, leaving the traders with $11 billion in damages.

FTX’s demise marked the newest turmoil for the cryptocurrency {industry} this yr. The general crypto market has slumped amid a string of meltdowns which have taken down different key gamers together with Voyager Digital and Celsius Community.

(Aside from the headline, this story has not been edited by NDTV employees and is printed from a syndicated feed.)