Former FTX CEO Sam Bankman-Fried arrested in Bahamas

According to Reuters, the founder and former CEO of FTX, Sam Bankman-Fried, aka SBF, has been arrested in Bahamas on December 12, 2022. (2300 GMT). And he is facing impending extradition.

(Twitter)

Sam Bankman-Fried, the founder of FTX, was arrested in the Bahamas on Monday at the request of US prosecutors, Some reports said that he was due to testify before Congress about the sudden collapse of one of the world's largest cryptocurrency exchanges last month.

The arrest marked a major low point for this 30-year-old entrepreneur. For many years, SBF and the company he founded, FTX, have built an impressive career in crypto world, which makes him a billionaire. However, with the collapse of FTX, that all went up in smoke. Just last week, SBF disclosed that he has only about $100,000 left.

The United States Attorney for the Southern District of New York reported the case on Twitter today. From October 10, 2021 to the present, the United States Attorney is Damian Williams.

(Portrait of Damian William, United States Department of Justice - https://www.justice.gov/usao-sdny/meet-us-attorney )

The Arrest of The Former Billionaire

SBF was arrested due to various financial offenses against the laws of the United States, which are also offenses against the laws of the Commonwealth of the Bahamas as the two countries share the same national interests. According to the statement released by Bahamas Police, at the request of the U.S. Government, Sam Bankman-Fried had been arrested after 6:00 pm Monday (2300 GMT) at his apartment, in Albany. He is expected to be extradited to the United States. “The Bahamas and the United States have a shared interest in holding accountable all individuals associated with FTX who may have betrayed the public trust and broken the law.” The statement said. According to the U.S. government, SBF has to testify before congress about the collapse of FTX.

The Bahamas officials said that it decided to arrest SBF after receiving a request from the US Attorney general that he be extradited to the US as soon as possible. As FTX filed for bankruptcy, billions of dollars went missing. The money had previously belonged to millions of FTX creditors. Thus, SBF will inevitably face a series of lawsuits after the extradition to the United States.

Below is the statement from the Attorney General of the Bahamas.

(From Office of The Attorney General& Ministry of Legal Affairs, Commonwealth of the Bahamas)

Missing Money

According to Reuters, the crisis at FTX came after SBF secretly transferred $10bn of FTX client money to Alameda Research, his proprietary trading firm. At least $1 billion of client money disappeared.

In a series of interviews and public appearances in late November and December, Mr Bankman-fried admitted to risk management failures but sought to distance himself from the fraud allegations, saying he had never knowingly mixed FTX client money with Alameda's.

On the other hand, many crypto investors sued Bankman-Fried, accusing him and a host of FTX promoters of fraudulent practices that cost investors $11billion.

The downfall of FTX rippled through the entire crypto industry. After the FTX collapse, BlockFi also shut down. The FX and crypto industry meets the “Winter”. And we do not know how long the winter will last, but we are sure that the crypto industry cannot recover from the mess in a short time.