US presses accusations, FTX’s Bankman-Fried was detained in the Bahamas

A cryptocurrency exchange’s founder was arrested just hours after saying he would testify before the US Congress.

Sam Bankman-Fried, who started the now-defunct cryptocurrency exchange FTX, was arrested in the Bahamas after American prosecutors filed criminal charges against him.

With his arrest, the 30-year-old crypto “wunderkind” who was once worth an estimated $26.5 billion, attracted investors like BlackRock and NFL star Tom Brady, and was one of the best-connected and biggest political fundraisers in Washington has taken a huge fall.

The Office of the Attorney General of the Bahamas said in a statement on Monday that Bankman-Fried was detained by police in the Caribbean country after US prosecutors informed them they had filed charges and would likely seek his extradition.

The US Attorney’s Office for the Southern District of New York confirmed Fried’s arrest, but declined to comment on the specific charges.

According to a statement from prosecutor Damian Williams, Samuel Bankman-Fried was arrested this evening at the request of the US Government based on a sealed indictment from the US Attorney’s Office for the Southern District of New York.

We plan to unseal the indictment the next morning and will have more to say then.

The New York Times quoted an unnamed source with knowledge of the case as saying that the charges against Bankman-Fried, who was once thought to be the second-richest millennial in the world after Mark Zuckerberg, include wire fraud, wire fraud conspiracy, securities fraud, securities fraud conspiracy, and money laundering.

The US Securities and Exchange Commission, which is in charge of administrative and civil enforcement operations, declared that it has independently authorized charges relating to Bankman’s alleged securities law violations.

Bahamas Prime Minister Philip Davis stated in a statement that his nation and the US have a “shared interest” in holding those who might have breached the public trust and broken the law fully accountable.

“The Bahamas will continue its own regulatory and criminal investigations into the collapse of FTX, with the continued cooperation of its law enforcement and regulatory partners in the United States and elsewhere,” Davis said. “While the United States is pursuing criminal charges against SBF individually,”

Bankman-Fried was arrested just a few hours after saying he would testify about the failure of FTX to the US Congress by phone on Tuesday.

The Bahamas-based and 2019-founded FTX filed for bankruptcy last month following the failure of a purchase agreement with rival exchange Binance. The collapse of the cryptocurrency exchange, which was worth $32 billion at its highest point, sent shockwaves through the industry. This led to a lot of layoffs, accusations of fraud, and worries about whether virtual currencies will be around in the long run.

FTX has been accused of utilizing billions of dollars in consumer funds to support Alameda, a trading firm governed by Bankman Fried, among other wrongdoings.

Bankman-Fried said that he made “a lot of mistakes” in how he handled the collapse, but he denied that he had planned to cheat people.

SOURCE: NEWS AGENCIES AND AL JAZEERA