Image Courtesy: Twitter
Samuel Bankman-Fried, an embattled cryptocurrency tycoon and former CEO of FTX, was detained in the Bahamas after being criminally charged by US prosecutors. Following the catastrophic failure of Bankman-FTX Fried’s platform, US authorities have been attempting to bring charges against him.
The arrest comes the night before Bankman-Fried was supposed to testify under oath on the sudden collapse of the cryptocurrency exchange at a US Congress hearing.
“Earlier this evening, Bahamian authorities arrested Samuel Bankman-Fried at the request of the U.S. Government, based on a sealed indictment filed by the SDNY,” the tweet said. “We expect to move to unseal the indictment in the morning and will have more to say at that time” he added.
USA Damian Williams: Earlier this evening, Bahamian authorities arrested Samuel Bankman-Fried at the request of the U.S. Government, based on a sealed indictment filed by the SDNY. We expect to move to unseal the indictment in the morning and will have more to say at that time.
— US Attorney SDNY (@SDNYnews) December 12, 2022
FTX, one of the world’s largest cryptocurrency exchanges, declared bankruptcy on November 11 in one of the most high-profile crypto meltdowns.
The liquidity crisis occurred after Bankman-Fried covertly transferred $10 billion in FTX client funds to Alameda, according to Reuters, citing two people familiar with the situation.
Following a November 2 report on relations between FTX and Alameda, a trading company also controlled by Bankman-Fried, which revealed that Alameda’s balance sheet was mainly constructed on the FTT currency – a token produced by FTX and with no independent value – FTX’s valuation crashed.
In early November, the price of FTT dropped, causing Alameda and FTX to panic.
In recent weeks, Samuel Bankman-Fried ignored legal counsel by providing his version of his company’s sudden failure, generally by video link from the Bahamas, where his company is headquartered.
