Sam Bankman-Fried, FTX’s founder, is arrested in the Bahamas

According to a statement from the Bahamas government, Sam Bankman-Fried, the creator of the defunct cryptocurrency exchange FTX, was detained on Monday in the Bahamas after US prosecutors filed criminal charges against him.

The Southern District of New York, which is investigating Bankman-Fried and the collapse of FTX and its sibling trading firm Alameda, confirmed his arrest on Twitter.

According to a sealed indictment submitted by the SDNY, Samuel Bankman-Fried was detained by Bahamian authorities earlier this evening at the US government’s request, according to US attorney Damian Williams. We plan to unseal the indictment the next morning and will have more to say then.

Bankman-Fried was peacefully taken into custody at his Nassau apartment complex soon after 6 p.m. ET on Monday and is scheduled to appear in court on Tuesday, according to a statement from the Royal Bahamas Police Force.

CNN requested response from a member of Bankman-legal Fried’s team, but they did not immediately answer.

The Securities and Exchange Commission announced it had authorised separate charges connected to Bankman-“violations Fried’s of securities laws” shortly after the SDNY confirmed his detention. These charges will be made public on Tuesday.
The 30-year-old crypto-celebrity Bankman-Fried, whose company experienced a liquidity crisis and filed for bankruptcy last month, making at least a million depositors unable to access their money, is facing charges that are still unknown.

According to the New York Times, who cited a source with knowledge of the situation, Bankman-Fried was charged with money laundering, securities fraud, wire fraud, and conspiracy to commit wire fraud.

According to the extradition agreement between the US and the Bahamas, defendants may be brought back to the US provided their offences carry a minimum one-year sentence in both countries.

In the four weeks since FTX declared bankruptcy, Bankman-Fried has fought to dispel claims that he misled FTX’s clients by portraying himself as an unlucky CEO who overshot his mark.

He told the BBC over the weekend, “I didn’t intend to commit fraud. “None of this was anything I wanted to occur. I realised that I was not nearly as capable as I had believed.

The US House Financial Services Committee, which is requesting explanations about how the company collapsed and reverberated throughout the digital asset ecosystem, scheduled Bankman-Fried to digitally testify before them on Tuesday. Due to their exposure to FTX, a number of cryptocurrency businesses have stopped operations, frozen customer accounts, and in some cases filed for bankruptcy.

Bankman-Fried was set to testify before the committee on Tuesday,

but after his arrest, chairwoman Rep. Maxine Waters announced that he will no longer do so. However, the meeting was scheduled to begin with evidence from John J. Ray III, the new CEO of FTX who took over for Bankman-Fried on November 11 and is in charge of guiding the company through the bankruptcy procedure.

Waters stated in a statement Monday night, “We are committed to getting to the bottom of what happened, even if I am unhappy that we won’t be able to hear from Mr. Bankman-Fried tomorrow.

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Ray has so far described a crypto empire with almost no corporate controls and shockingly poor record-keeping of finances and other matters.

In prepared remarks made public on Monday before his hearing, Ray stated that the current investigation’s scope was “enormous.”

FTX’s demise, according to Ray, appears to be related to the concentration of power “in the hands of a very small group of severely incompetent and naive individuals” who failed to put hardly any corporate controls in place, even though the investigation isn’t over.

Additionally, Ray asserts as fact that “assets from the Alameda trading platform were mixed up with customer assets from” To the best of the investigators’ knowledge, FTX and Alameda were independent legal entities.


Denies from SBF
According to information from The Wall Street Journal, Bankman-Fried has denied knowingly combining funds and has made an effort to put himself outside of the daily management of Alameda, which engaged in a number of high-risk trading practises like arbitrage and “yield farming,” or investing in digital tokens that offer rewards similar to interest rates.

He has acknowledged that he mismanaged FTX and neglected to consider risk enough.

He admitted his error late last month at the DealBook Summit hosted by the New York Times. I oversaw FTX as CEO. I had a duty to fulfil.

Bankman-Fried also admitted that the companies he controlled lacked corporate governance and risk management.

According to Bankman-Fried of DealBook, “there was no one who was principally in charge of positional risk of customers on FTX.” And looking back, that feels fairly embarrassing.

According to a Reuters investigation from last month, Bankman-Fried allegedly installed a “backdoor” into FTX’s accounting system, enabling him to change the company’s financial records without raising any accounting red flags. This raises one of the main mysteries behind FTX’s demise. According to the investigation, Bankman-Fried transferred $10 billion in FTX client funds to the hedge fund Alameda using this “backdoor,” and at least $1 billion is now gone.

Bankman-Fried has refuted any knowledge of a backdoor of this nature. He admitted to bitcoin vlogger Tiffany Fong in an interview from last month that “I don’t even know how to code.”