- Mr. Bankman-Fried was arrested for Financial Offenses.
- The FTX exchange allowed clients to trade fiat currency for Bitcoin.
- It is the second largest cryptocurrency exchange in the world.
Sam Bankman-Fried is detained by the Bahamas police, the creator of the defunct cryptocurrency exchange FTX, according to the attorney general of the country.
He is set to appear in a Nassau, the capital of the Caribbean nation, magistrates court on Tuesday.
Mr. Bankman-Fried was arrested for “Financial Offenses” under U.S. and Bahamian law, according to the police.
Last month, FTX declared bankruptcy in the United States, rendering many users unable to withdraw payments.
According to court documents filed last month, FTX owed its 50 largest creditors over $3.1 billion (£2.5 billion).
It is unknown how much the exchange’s depositors will receive at the conclusion of bankruptcy procedures, while numerous experts have cautioned that it may be a small percentage of the amount placed.
The FTX exchange allowed clients to trade fiat currency for Bitcoin and other cryptocurrencies.
Mr. Bankman-Fried was formerly seen as a younger counterpart of famed US investor Warren Buffett, and as of late October he was projected to have a net worth of more than $15 billion.
In Washington, DC, he was well-known as a political fundraiser, ostensibly promoting pandemic prevention and enhanced crypto regulation.
Mr. Bankman-Fried will be detained “in accordance with our nation’s Extradition Act,” according to a statement from the Attorney General of the Bahamas.
“This evening, at the request of the United States government, Bahamian police arrested Samuel Bankman-Fried based on a sealed indictment filed by the SDNY [Southern District of New York]. We anticipate taking action to unseal the indictment in the morning and will have additional comments at that time “Manhattan’s US Attorney’s office stated in a tweet.
Additionally, Wall Street regulators stated they would take action against Mr. Bankman-Fried.
US Securities and Exchange Commission (SEC) spokesman Gurbir Grewal said in a statement, “We appreciate our law enforcement partners for their efforts to secure Mr. Sam Bankman-arrest Fried’s in the Bahamas on federal criminal charges.”
“The Securities and Exchange Commission has separately authorised charges related to Mr. Bankman-violations Fried’s of our securities laws, which will be publicly filed tomorrow in the Southern District of New York,” he continued.
Tuesday, Mr. Bankman-Fried was scheduled to appear before the US Congress regarding the collapse of FTX.
Congresswoman Maxine Waters, who was astonished to hear of his detention, stated that he will no longer be allowed to testify.
Mr. Bankman-Fried, a former Wall Street trader, and Gary Wang, a former Google employee, launched FTX, the owner and operator of the FTX.COM cryptocurrency exchange, in 2019.
It has become the second largest cryptocurrency exchange in the world, exchanging over $10 billion every day.
However, on 11 November FTX filed for bankruptcy after consumers withdrew $6 billion from the platform in three days and a competing exchange abandoned a rescue arrangement. Simultaneously, Mr. Bankman-Fried resigned as chief executive officer of FTX.
Mr. Bankman-Fried has recognised that mistakes were made at the company in a series of interviews and public appearances over the past few weeks, but he has distanced himself from allegations of illicit behaviour.
End of last month, he stated at the New York Times’ DealBook Summit, “I never intended to commit fraud.”
FTX’s demise occurred during a turbulent year for the cryptocurrency sector. Bitcoin has lost more than 60 percent of its value this year, and other cryptocurrencies have also declined in value.
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