FTX founder Sam Bankman-Fried arrested in Bahamas
FTX filed for bankruptcy last month
Sam Bankman-Fried, the co-founder of cryptocurrency exchange FTX, was taken into custody in the Bahamas on Monday after the US government filed a criminal indictment.
According to a statement from Ryan Pinder, attorney general of the island country, Bankman-Fried will be held in custody pending the outcome of extradition proceedings to the USA.
The Bahamain Police took Bankman-Fried into custody just after 18:00 on Monday (23:00 GMT) at his apartment complex in Albany, Nassau.
'He was arrested reference to various Financial Offences against laws of the United States, which are also offences against laws of the Commonwealth of The Bahamas,' the police said in a statement.
SBF, as Bankman-Fried is also known, will make an appearance before the Magistrate Court in Nassau on Tuesday.
The US Attorney's office in Manhattan tweeted: 'Earlier this evening, Bahamian authorities arrested Samuel Bankman-Fried at the request of the US Government, based on a sealed indictment filed by the SDNY [Southern District of New York]. We expect to move to unseal the indictment in the morning and will have more to say at that time.'
The arrest came a day before Bankman-Fried was supposed to appear before a US Congress panel and testify under oath about FTX's sudden demise.
Bankman-Fried and ex-Google employee Gary Wang founded FTX, owner of the FTX.com cryptocurrency exchange, in 2019.
With daily cryptocurrency trades of about $10 billion, it soon grew to become the second-largest crypto exchange in the world after Binance.
FTX's success saw Bankman-Fried hailed as a young version of famed American investor Warren Buffett. As of late October, his net worth was believed to be more than $15 billion.
But that came crashing down on 11th November, when FTX filed for bankruptcy protection after customers withdrew $6 billion from the platform within three days. Bankman-Fried then stepped down from his position as CEO.
The liquidity crunch came following the revelation that SBF had covertly transferred $10 billion in FTX client cash to Alameda, a trading firm that was also under his control. After the news broke, FTX's value collapsed. A court document from last month showed that FTX owes its 50 biggest creditors close to $3.1 billion.
I was certainly not nearly as competent as I thought I was
Speaking to the BBC, Bankman-Fried admitted that the company had made errors but denied allegations of unlawful conduct.
"I didn't knowingly commit fraud, I don't think I committed fraud, I didn't want any of this to happen. I was certainly not nearly as competent as I thought I was," he said.
Bankman-Fried was scheduled to testify before the US Congress about FTX's collapse today. He will now be unable to testify, said Congresswoman Maxine Waters, who was apparently unaware of the moves to arrest him.
"I am surprised to hear that Sam Bankman-Fried was arrested in the Bahamas at the direction of the United States Attorney for the Southern District of New York," Waters said.
"It's about time the process to bring Mr. Bankman-Fried to justice has begun. However, as the public knows, my staff and I have been working diligently for the past month to secure Mr. Bankman-Fried's testimony before our Committee tomorrow morning. We received confirmation this afternoon from Mr. Bankman-Fried and his lawyers that he was still planning to appear before the Committee tomorrow, but then he was arrested.
"Although Mr. Bankman-Fried must be held accountable, the American public deserves to hear directly from Mr. Bankman-Fried about the actions that've harmed over one million people, and wiped out the hard-earned life savings of so many. The public has been waiting eagerly to get these answers under oath before Congress, and the timing of this arrest denies the public this opportunity. While I am disappointed that we will not be able to hear from Mr. Bankman-Fried tomorrow, we remain committed to getting to the bottom of what happened, and the Committee looks forward to beginning our investigation by hearing from [new FTX CEO] Mr. John Ray III tomorrow."