Sam Bankman-Fried, the founder and former chief executive officer (CEO) of cryptocurrency exchange FTX, has been arrested in the Bahamas after U.S. authorities filed a criminal indictment against him.
Bankman-Fried, age 30, is being held in custody in the Bahamas where he lives while U.S. authorities expedite an extradition process to bring him back to America.
Federal prosecutors in the New York borough of Manhattan plan to outline their case against Bankman-Fried later today (December 13). The U.S. Securities and Exchange Commission (SEC) is also expected to file civil charges against Bankman-Fried for violating multiple securities laws.
Bankman-Fried has been under investigation in the U.S. and the Bahamas, where FTX was headquartered, following the November 11 bankruptcy of the crypto exchange. FTX collapsed suddenly and without much warning, citing $8 billion U.S. in losses and more than one million creditors.
Investors who had money with the FTX exchange before its collapse have accused Bankman-Fried of fraud and illegally misusing their funds.
In multiple media interviews that he’s given since FTX’s failure, Bankman-Fried has admitted to major managerial shortcomings, but has also said that he never intentionally broke the law.
Even before it went bankrupt, federal prosecutors in Manhattan had been investigating FTX as part of broader probe into crypto exchanges and potential anti-money laundering violations.
Prosecutors were examining whether hundreds of millions of dollars were improperly transferred to the Bahamas around the time of FTX’s November 11 bankruptcy.
Authorities were also looking into whether FTX broke the law by transferring funds to Alameda Research, the bankrupt investment firm that was also founded and owned by Bankman-Fried.
