Crypto forme rCEO Sam Bankman-Fried arrested in Bahamas

Sam Bankman-Fried was arrested within the Bahamas on Monday within the wake of the spectacular failure of his cryptocurrency alternate FTX.

He was anticipated to be extradited to the U.S. after the bust, which got here on the request of federal prosecutors in Manhattan.

“Earlier this night, Bahamian authorities arrested Samuel Bankman-Fried on the request of the U.S. authorities, based mostly on a sealed indictment filed by the US lawyer’s workplace for the Southern District of New York,” Damian Williams, U.S. lawyer for the Southern District of New York, mentioned in an announcement. “We count on to maneuver to unseal the indictment within the morning and may have extra to say at the moment.”

Bankman-Fried, 30, stepped down from FTX because it imploded final month when buyers demanded their funds again and the corporate was unable to pay. The $32 billion agency filed for Chapter 11 chapter safety on Nov. 11, and John Ray III took over.

Bankman-Fried had been anticipated to testify alongside Ray, the lawyer who oversaw Enron’s liquidation, earlier than the Home Monetary Providers Committee on Tuesday. The panel’s plans weren’t instantly identified within the wake of the arrest.

The bust was seen as a primary step for regulators searching for to carry people accountable for FTX’s failure. A number of celebrities who promoted the corporate — together with comic Larry David, who starred in a Tremendous Bowl advert for FTX — are being sued by buyers alleging they have been defrauded.

Bankman-Fried mentioned final month that he had not meant to tear anybody off and didn’t “knowingly” misuse hundreds of thousands of consumers’ funds. He additionally mentioned the shoppers who’re scrambling for his or her dough would finally get their a reimbursement.

FTX, which is predicated within the Bahamas, was based in 2019 and rapidly made Bankman-Fried the poster little one of cryptocurrency.

His fall from grace has shocked members of the trade, who as soon as thought he may change into the primary trillionaire on the earth.

Bahamian authorities mentioned they’re additionally investigating the crypto alternate.

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“The Bahamas and the US have a shared curiosity in holding accountable all people related to FTX who might have betrayed the general public belief and damaged the legislation,” Bahamian Prime Minister Philip Davis mentioned in an announcement obtained by CNBC.

Ray, FTX’s new CEO, says the agency’s practices have been even worse than these of Enron, the enormous vitality firm that crumbled in 2001.

“FTX Group’s collapse seems to stem from absolutely the focus of management within the fingers of a really small group of grossly inexperienced and unsophisticated people who did not implement just about any of the techniques or controls which might be obligatory for a corporation that’s entrusted with different individuals’s cash or property,” he mentioned in remarks he ready for Tuesday’s congressional listening to.

FTX’s failure has prompted discuss of latest laws for the trade.

Two payments launched by U.S. Rep. Ritchie Torres (D-N.Y.) would require cryptocurrency exchanges to take measures to stop one thing just like the FTX collapse from taking place once more. Crypto exchanges can be forbidden to lend their clients’ cash with out the shoppers’ consent, and a few of these exchanges must report the quantities of their property and liabilities to the federal government.

With Information Wire Providers