“Former FTX CEO Arrested on Criminal Charges”
Former FTX CEO Sam Bankman-Fried, who was hailed as a crypto savior just a few months ago, has been arrested on criminal charges in the Bahamas. He will be extradited to the US where he will face federal charges from a sealed indictment that is set to be opened Tuesday
morning. The charges include wire fraud, wire fraud conspiracy, securities fraud, securities fraud conspiracy, and money laundering.
The arrest comes as Bankman-Fried’s crypto exchange FTX was accused of being secretly insolvent and of lending customer funds to its sister hedge fund, Alameda Research. The accusations sparked a bank run, with customers rushing to pull their money out. FTX filed for bankruptcy on 11 November and Bankman-Fried resigned as CEO. The company owes at least $3bn to over one million creditors. Experts say it is unlikely FTX customers will ever see their money again.
Despite FTX’s collapse, Bankman-Fried continued to give interviews to the
press from his home in the Bahamas, claiming he did not know how much financial trouble both of his companies were in. When asked about potential prison time, he said: “There will be a time and place to sort of think about myself and my own future. But I don’t think this is it.”
Bankman-Fried was set to testify at a hearing before the House Committee o
n Financial Services on Tuesday morning. Instead, he will appear in Bahamian court. The US Securities and Exchange Commission said it has “authorized separate charges relating to his violations of securities laws [that] will be filed publicly tomorrow in SDNY”. The Bahamian Prime Minister said the country would “continue its own regulatory criminal investigations into the collapse of FTX”.
The collapse of FTX is likely to have long-lasting implications for the crypto
industry, which has suffered declines in value and popularity since spiking in 2021. Ban
kman-Fried was the face of the industry in Washington, having claimed to have spent “hundreds, probably thousands of hours” seeking meetings with regulators and legislators