Sam Bankman-Fried, the founder of failed crypto exchange FTX, has been arrested in the Bahamas, the country’s attorney general has announced. He is scheduled to appear in a magistrate’s court in Nassau, the capital of the Caribbean nation, on Tuesday. Police said Bankman-Fried, 30, was arrested for “financial crimes” against US and Bahamian law. Last month, FTX filed for bankruptcy in the US, leaving many users unable to withdraw their funds. Court filings show FTX owes around $3.1bn (£2.5bn) to its top 50 creditors. One of the most severe allegations against Bankman-Fried is that he used billions of dollars in client funds to support the investment trading firm, Alameda. It’s unclear how much those who have funds on the exchange will get back at the end of bankruptcy proceedings, but many experts warn that it could be a small portion of their deposits.
“I did not commit fraud on purpose.
He also denied claims that he must have known Alameda was using FTX client funds. “No, that’s not true,” said Bankman-Fried, acknowledging that as CEO he is ultimately responsible for the misuse of funds. “Anyway, it’s up to me,” he said. The FTX exchange allowed customers to exchange regular money for cryptocurrencies such as Bitcoin. Cryptocurrencies are not a currency in the traditional sense but are stored online and behave like investment vehicles and securities. Volatility is often high. Their anonymity means they have favored criminal activities such as drug trafficking and ransomware attacks, but their supporters believe they have great potential for innovation and independence from the government. It says there is
Bankman-Fried, once considered a younger version of legendary US investor Warren Buffett, had an estimated net worth of over $15 billion at the end of October. Before FTX went bankrupt, he seemed happy to give his Twitter followers a glimpse of his lifestyle. His lifestyle consisted of playing League of Legends on his phone, trying to bring in investors, and sleeping in a beanbag next to his office desk. He was infamous in Washington DC as a political donor, primarily donating to Democratic politicians and organizations, and allegedly advocating pandemic prevention and better crypto regulation. The owner and operator of cryptocurrency exchange FTX.COM, FTX was launched in 2019 by former Wall Street trader Bankman-Fried and former Google employee Gary Wang. was established in
It has become the second largest cryptocurrency exchange in the world, trading approximately $10 billion in cryptocurrencies daily. But on November 11, FTX filed for bankruptcy protection after users withdrew $6 billion from the platform in three days and rival exchange Binance waived the bailout. At the same time, Bankman-Fried stepped down as CEO of his FTX. The FTX demise has been a tumultuous year for the crypto industry. Bitcoin has lost more than 60% of its value this year, and other cryptocurrencies have plummeted.