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Disgraced FTX founder Sam Bankman-Fried has been arrested within the Bahamas and shall be extradited to the U.S. to face prison expenses stemming from the sudden implosion of his cryptocurrency alternate final month.
Authorities within the Bahamas made the arrest after receiving discover from the U.S. that it had filed expenses towards the 30-year-old and possibly would request his extradition, the nation’s authorities stated Monday afternoon.
“The Bahamas and the US have a shared curiosity in holding accountable all people related to FTX who could have betrayed the general public belief and damaged the legislation,” Prime Minister Philip Davis stated in an announcement.
The arrest caps off a shocking fall from grace for Bankman-Fried, who was, till very lately, thought-about the golden boy and white knight of the crypto world. At one level, he was estimated to be price $26 billion; now he claims to have simply $100,000 left.
As chief govt of FTX, Bankman-Fried grew the cryptocurrency alternate he based in 2019 into one of many largest on the planet, with greater than 1 million customers at its peak final yr. He was hailed as a optimistic pressure and reliable spokesperson for the rising business, particularly as he rescued a number of failing crypto companies this yr.
However FTX collapsed in spectacular style final month when customers, apprehensive concerning the alternate’s solvency, started pulling out their cash en masse. That led to a catastrophic fiasco for FTX, which filed for Chapter 11 chapter safety on Nov. 11. At the very least $1 billion in buyer funds has disappeared, in response to estimates, and the collapse has triggered a surge in outflows throughout different international crypto exchanges.
In a courtroom submitting submitted a number of days later, its newly put in chief govt, John J. Ray III, a longtime insolvency knowledgeable, detailed the disastrous state of economic affairs on the once-heralded firm.
“I’ve been the Chief Restructuring Officer or Chief Government Officer in a number of of the most important company failures in historical past,” Ray wrote in his declaration. “By no means in my profession have I seen such a whole failure of company controls and such a whole absence of reliable monetary info as occurred right here.”
FTX and Bankman-Fried are actually going through investigations within the U.S. and the Bahamas, the place the corporate is predicated, into a variety of doable fraud.
One key inquiry issues whether or not buyer funds have been lent to buying and selling agency Alameda Analysis, which Bankman-Fried additionally based. Prosecutors are additionally analyzing whether or not tons of of hundreds of thousands of {dollars} have been improperly transferred to the Bahamas across the time of FTX’s chapter submitting.
The arrest was made based mostly on a sealed indictment, stated Damian Williams, the U.S. lawyer for the Southern District of New York.
“We count on to maneuver to unseal the indictment within the morning and can have extra to say at the moment,” Williams stated in an announcement posted on Twitter.
Shortly afterward, the U.S. Securities and Trade Fee stated it had licensed separate expenses towards Bankman-Fried “referring to his violations of securities legal guidelines, to be filed publicly tomorrow.”
Bankman-Fried was scheduled to testify earlier than the Home Monetary Companies Committee on Tuesday. However he declined to look for a listening to with the Senate Banking Committee the day after, prompting lawmakers to sentence his “unprecedented abdication of accountability.”
Congresswoman Maxine Waters (D-Los Angeles), chairwoman of the Home Monetary Companies Committee, stated she was “stunned” to listen to of Bankman-Fried’s arrest given his scheduled look the subsequent day.
“Though Mr. Bankman-Fried have to be held accountable, the American public deserves to listen to immediately from Mr. Bankman-Fried concerning the actions that’ve harmed over a million folks, and worn out the hard-earned life financial savings of so many,” Waters stated in an announcement. “The timing of this arrest denies the general public this chance.”
Bankman-Fried had been on a media blitz in current weeks, doling out quite a few interviews in an effort to elucidate what occurred at FTX.
Earlier on Monday, throughout an interview on Twitter Areas, he stated he was going to testify earlier than the Home remotely, as an alternative of in individual, on Tuesday as a result of “the paparazzi impact is sort of giant.”
“Are you apprehensive you may be detained should you stepped foot into the U.S.?” one of many panelists responded.
“I don’t imagine I might be,” Bankman-Fried stated.
Bloomberg was utilized in compiling this report.
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