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Former FTX CEO Sam Bankman-Fried arrested in Bahamas


NEWYORK: Sam Bankman-Friedfounder and leader FTX until a liquidity crisis forced electronic money exchange, which filed for bankruptcy last month, was arrested on Monday in The Bahamas after being charged criminally by US prosecutors.
It marks a staggering downfall for the 30-year-old entrepreneur who fueled the crypto boom to create one of the world’s largest cryptocurrency exchanges and a net worth that Forbes has compiled. closed a year ago at $26.5 billion.
The exchange, which launched in 2019 and is based in The Bahamas, filed for bankruptcy on November 11 after struggling to raise funds to prevent a fall as traders rushed withdraw 6 billion dollars from the platform in just 72 hours.
The Bahamas attorney general’s office said it carried out the arrest after receiving official confirmation of the charges against Bankman-friedadded that it hoped he would be extradited to the United States.
A statement from Bahamas Police said Bankman-Fried was arrested shortly after 6:00 p.m. Monday (2300 GMT) at his apartment complex, located in Albany, Nassau, in the Bahamas.
“He was arrested in connection with multiple Financial Violations against the laws of the United States, which were also crimes against the laws of the Commonwealth of the Bahamas,” the statement said, adding that he had been taken into custody. without incident and will appear in Nassau Magistrates’ Court on Tuesday.
A spokesperson for the US attorney’s office in Manhattan confirmed Bankman-Fried was arrested in The Bahamas but declined to comment on the allegations.
“Early this morning, Bahamian authorities arrested Samuel Bankman-Fried at the request of the United States Government, based on a sealed indictment issued by the United States Attorney’s Office for the Southern District of New York,” said US prosecutor Damian Williams said in a statement. . “We are expected to proceed with the unsealing of the indictment in the morning and will have much to say by that time.”
Mark Cohen, Bankman-Fried’s attorney, did not immediately respond to a request for comment.
Bankman-Fried’s indictment by US authorities comes as the Justice Department is reviewing allegations against a much larger player in the crypto world, the industry’s leading exchange. exchanges.
Reuters reported on Monday that several Justice Department prosecutors believe they have gathered enough evidence in the lengthy investigation into Binance to charge the company and several top executives. A Binance spokesperson told Reuters regarding the story: “We do not have any insight into the inner workings of the US Department of Justice, and we would not be appropriate to comment. if.”
Binance is being investigated for possible money laundering and sanctions violations, Reuters reported. Others in the department argued for taking the time to review further evidence, four people familiar with the matter told Reuters.
The arrest also comes a day before Bankman-Fried’s scheduled appearance before US lawmakers on Tuesday, where he plans to give testimony via a video link.
investigate
FTX’s liquidity crunch comes after Bankman-Fried secretly transferred $10 billion in FTX client funds to its proprietary trading firm, Alameda Research, Reuters reported, citing two people familiar with the matter. this topic. At least $1 billion in client funds disappeared, the people said.
Bankman-Fried told Reuters the company was not “secretly transferring” but simply misreading “confusing internal labeling”. When asked about the missing amount, he replied: “???”
In a series of interviews and public appearances in late November and December, Bankman-Fried acknowledged risk management failures but sought to distance himself from the fraud allegations, saying he never now intentionally mixing client funds on FTX with funds at Alameda.
“I have never tried to commit fraud,” Bankman-Fried said in a November 30 interview at the New York Times Dealbook Summit, adding that he personally I do not think that I should bear any criminal responsibility.
Bankman-Fried stepped down as chief executive officer of FTX the same day it filed for bankruptcy.
The US attorney’s office in Manhattan, led by veteran securities fraud prosecutor Williams, in mid-November began investigating how FTX handled customer funds, a source familiar with the investigation said. told Reuters.
The Securities and Exchange Commission and the Commodity Futures Trading Commission have also opened polls.
U.S. crypto investors also sued Bankman-Fried, accusing him and a host of celebrities of promoting FTX of engaging in fraudulent practices that cost investors $11 billion.
The crash of FTX marks the latest turmoil to the crypto industry this year. The overall crypto market has tumbled amid a series of crises that have knocked other key players down including Voyager Digital and Celsius Network.

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