Sam Bankman-Fried was detained on Monday (December 12) in the Bahamas at the request of the United States. He was a disgraced cryptocurrency tycoon and the former CEO of the now-defunct crypto platform FTX.
Bankman-Fried increased the number of media appearances in which he offered his explanation for his company’s abrupt demise
The arrest was made on the eve of Bankman-Fried’s scheduled appearance at a US Congress hearing. He was to testify under oath about the spectacular fall of his crypto exchange. In recent weeks, Bankman-Fried increased the number of media appearances in which he offered his explanation for his company’s abrupt demise, frequently by video link from the Bahamas, where his company is based.
“Earlier this evening, Bahamian authorities arrested Samuel Bankman-Fried at the request of the US Government, based on a sealed indictment filed by the southern district of New York,” said a tweeted statement from Damian Williams, lead prosecutor for the district. “We expect to move to unseal the indictment in the morning and will have more to say at that time,” he added.
FTX is suspected of fraud for allegedly supporting Alameda
After achieving a $32 billion valuation, FTX’s collapse was precipitous in the wake of a November 2 investigation on connections between FTX and Alameda, a trading firm also under Bankman-management. Fried’s research revealed that FTT, a cryptocurrency developed by FTX but with no independent value, was prominently used in Alameda’s balance sheet. On November 11, FTX and a number of related entities filed for bankruptcy protection, reeling from customer withdrawals and short about $8 billion. This drew the attention of regulators, prosecutors, and irate customers who had bought into the cryptocurrency hype.
FTX is suspected of fraud for allegedly supporting Alameda with billions of dollars in customer cash that is now very certainly lost forever, according to the allegations.