FTX failed final month in what was primarily a cryptocurrency model of a financial institution run. Ex-CEO Sam Bankman-Fried was scheduled to testify earlier than Congress on Tuesday.
NEW YORK — The former CEO of failed cryptocurrency agency FTX, Sam Bankman-Fried, was arrested Monday within the Bahamas on the request of the U.S. authorities, U.S. and Bahamian authorities.
Bankman-Fried had been underneath prison investigation by the 2 nations following the collapse last month of FTX. The agency filed for chapter on Nov. 11, when it ran out of cash after the cryptocurrency equal of a financial institution run.
“Earlier this night, Bahamian authorities arrested Samuel Bankman-Fried on the request of the U.S. Government, based mostly on a sealed indictment filed by the United States Attorney’s Office for the Southern District of New York,” U.S. Attorney Damian Williams stated in an announcement Monday. He stated he anticipated the indictment could be unsealed Tuesday.
Bankman-Fried’s arrest comes just a day before he was due to testify in entrance of the House Financial Services Committee, together with the corporate’s present CEO, John Ray III.
Bahamian Attorney General Ryan Pinder stated the Bahamas would “promptly” extradite Bankman-Fried to the U.S. as soon as the indictment is unsealed and U.S. authorities make a proper request. Meanwhile, Bahamian authorities plan to proceed their very own investigation into Bankman-Fried.
“The Bahamas and the United States have a shared curiosity in holding accountable all people related to FTX who could have betrayed the general public belief and damaged the legislation,” Bahamian Prime Minister Phillip Davis stated in an announcement.
FTX was headquartered within the Bahamas, and since its failure Bankman-Fried has remained in his luxurious compound in Nassau.
Separately, the Securities and Exchange Commission stated it additionally plans to file expenses Tuesday in opposition to Bankman-Fried for violating U.S. securities legislation.
Bankman-Fried, who was one of many world’s wealthiest individuals on paper, went from king of cryptocurrencies to his arrest in a month. FTX was the second-largest cryptocurrency trade on the planet earlier than it went bankrupt, however the trade intermingled clients deposits with its funding arm, Alameda Research.
Before its failure, Bankman-Fried was a distinguished character in Washington, donating hundreds of thousands of {dollars} towards principally left-leaning political causes and Democratic political campaigns.
Ray, the brand new CEO of FTX in chapter and a long-time restructuring specialist, has stated in court filings that the financial conditions at FTX had been worse than at Enron.
Bankman-Fried said recently that he didn’t “knowingly” misuse clients’ funds, and stated he believes his hundreds of thousands of indignant clients will finally be made complete.
A spokesman for Bankman-Fried had no remark Monday night.
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