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FTX founder arrested in the Caribbean — RT Business News


Former crypto exchange CEO faces multiple rounds of charges in the US

The founder and CEO of the ill-fated FTX cryptocurrency exchange, Samuel Bankman-Fried, has been arrested in the Bahamas at the request of US authorities. He is now awaiting criminal charges, weeks after his multi-billion dollar business went bankrupt.

The Bahamian government released a statement late Monday announcing the arrest, noting that the move “upon receipt of official notification from the United States that they have filed criminal charges against [Bankman-Fried] and is likely to request his extradition.

The US Department of Justice later confirmed that the disgraced CEO was in custody, with US attorney Damian Williams saying the arrest was “on the basis of a sealed indictment filed by the [Southern District of New York].” He added that the indictment would be made public on Tuesday.

A source familiar with the matter told The New York Times that the charges against Bankman-Fried would include money laundering, wire fraud, wire fraud conspiracy, securities fraud and securities fraud conspiracy, and noted that he is currently the only FTX executive to be charged.

Prosecutors reportedly investigated whether the crypto exchange broke laws by transferring money to a separate hedge fund operated and owned by Bankman-Fried before FTX went bankrupt in November. Regulators also examined how the Bahamas-based exchange ended up with an $8 billion gap on its balance sheet, and whether FTX lent money to the hedge fund, Alameda Research, for risky trades.

Bankman-Fried’s arrest comes less than 24 hours before a House Financial Services Committee hearing he planned to attend virtually on Tuesday, where he was scheduled to testify about FTX’s downfall. California Democrat Maxine Waters, who oversees the committee, said she was “surprised” that he was in custody and expressed disappointment that lawmakers were not hearing his testimony.

The FTX founder has denied any suggestion that he defrauded his clients before his company went bankrupt, saying instead that he “fucked up” while managing the large crypto exchange, which was among the largest in the world during its heyday. “I made a lot of mistakes. There are things I would give anything to do again. he told an audience at a New York Times event last month.

Investors Are Dropping Crypto in Record Numbers After FTX Collapse – Data

Nevertheless, Bankman-Fried now faces extradition and a major legal battle in the United States, where the Securities and Exchange Commission has also announcement a separate round of charges related to “violations of securities laws”. The agency said the indictment would be formally filed on Tuesday.

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