Sam Bankman-Fried, the creator of the defunct cryptocurrency exchange FTX, has reportedly been taken into custody in The Bahamas, according to the attorney general of that country.
It is set for him to make an appearance on Tuesday at a magistrates’ court in Nassau, which is the capital of the Caribbean nation.
According to the police, Mr. Bankman-Fried, who is 30 years old, was detained for “financial offences” that violated regulations in both the United States and The Bahamas.
After filing for bankruptcy in the United States a month ago, FTX has left many of its users unable to withdraw their monies.
A document submitted to the court stated that FTX owed its 50 largest creditors a total of roughly $3.1 billion (£2.5 billion).
The claim that Mr. Bankman-Fried used tens of billions of dollars worth of customer assets to prop up his investment trading company, Alameda, is one of the most serious claims made against him.
It is not certain how much money customers who have funds in the exchange will get back once the bankruptcy proceedings are complete; nevertheless, numerous experts have warned that it may only be a small portion of what they first put.
Sam Bankman-Fried has refuted allegations that he was aware customer funds were used for potentially dangerous financial plays.
Mr. Bankman-Fried admitted that blunders had been made within the company, but he made an effort to put space between himself and allegations of unethical or unlawful behaviour.
“I had no intention of committing fraud, I don’t believe I have done fraud, and I had no desire for any of this to take place. I was by no means even close to being as competent as I had imagined I was, “.
In addition, he refuted the allegations that he must have been aware that Alameda was taking funds from FTX customers.
Mr. Bankman-Fried said, “No, that’s not accurate,” but he went on to recognise that as chief executive he was ultimately liable for any improper management of cash. “No, that’s not true,” he replied. It was his responsibility, he continued, “one way or another.”
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Customers were able to trade traditional currencies, such dollars, for cryptocurrencies, like bitcoin, on the FTX market.
Cryptocurrencies are not currencies in the conventional sense; rather, they are held digitally online and behave more like investment vehicles or stocks, albeit frequently exhibiting a great degree of volatility.
Due to the fact that they are anonymous, they have become popular for engaging in illegal activities such as trading drugs and launching ransomware attacks; yet, others who favour them argue that there is a significant opportunity for innovation and independence from governments.
As recently as the end of October, Mr. Bankman-Fried was reported to have a net worth of more than $15 billion. In the past, he was considered to be a younger counterpart of the famed American investor Warren Buffett.
Before the collapse of FTX, he seemed to take great pleasure in giving an insight into his lifestyle to the people who followed him on Twitter. This included playing League of Legends while on phone calls, even while attempting to woo investors, and sleeping on a beanbag next to his desk in the office.
He had established a strong reputation in the nation’s capital as a political donor, primarily to Democratic politicians or organisations, under the pretence that he supported efforts to reduce the risk of pandemics and to strengthen crypto regulation.
The downfall of Sam Bankman-Fried, known as the “King of Crypto,” and the collapse of crypto powerhouse FTX into bankruptcy
In a statement, the Attorney General of the Bahamas announced that Mr. Bankman-Fried will be detained “pursuant to our nation’s Extradition Act.” This means that he will be subject to the provisions of the law.
“Samuel Bankman-Fried was taken into custody by Bahamian officials earlier this evening at the request of the United States government. The arrest was made in response to a sealed indictment submitted by the Southern District of New York (SDNY). We anticipate taking action to unseal the indictment in the morning, at which point we will have further comments to make “the United States Attorney’s Office for the Southern District of New York said in a tweet.
Additionally, officials from Wall Street have stated that they will be taking action against Mr. Bankman-Fried.
An official of the United States Securities and Exchange Commission (SEC) named Gurbir Grewal issued a statement in which he praised the efforts of the country’s law enforcement agencies “for working to achieve the arrest of Mr. Sam Bankman-Fried 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 filed publicly tomorrow in the Southern District of New York,’ he went on to say after the previous statement.
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On Tuesday, Mr. Bankman-Fried was going to give testimony in front of the United States Congress regarding the collapse of FTX.
According to Congresswoman Maxine Waters, who said in a statement that she was astonished to hear that he had been detained, he will no longer be eligible to testify. Waters stated that she was surprised to hear that he had been arrested.
Gary Wang, a former employee of Google, and Mr. Bankman-Fried, a former trader on Wall Street, established the cryptocurrency exchange known as FTX in 2019. FTX is the owner of and the operator of the website known as FTX.COM.
It has grown to become the second largest cryptocurrency exchange in the world, with daily trading volume of approximately $10 billion USD worth of cryptocurrencies.
But on November 11th, FTX filed for protection from creditors after users withdrew $6 billion from the platform over the course of three days and a competing exchange, Binance, pulled out of a rescue arrangement. Simultaneously, Mr. Bankman-Fried stepped down from his position as chief executive officer of FTX.
The year 2018 was a turbulent one for the cryptocurrency sector overall, and this was reflected in the demise of FTX. The value of Bitcoin has dropped by more than sixty percent so far in 2018, and the value of other cryptocurrencies has also dropped.
