FTX CEO Sam Bankman-Fried
Cryptocurrency FTX Says Hackers Stole Assets After Bankruptcy Filing Photo by: Reuters/FTX

U.S. and Bahamian authorities said Monday that at the request of the U.S. government, Sam Bankman-Fried, the former CEO of failed cryptocurrency firm FTX, was arrested in The Bahamas.

According to U.S. Attorney Damian Williams, he was arrested Monday after the U.S. filed criminal charges, reported Reuters. After the collapse of FTX last month, he had been under criminal investigation by U.S. and the Bahamian authorities. On Nov. 11, the firm filed for bankruptcy after it ran out of money following the cryptocurrency equivalent of a bank run, reported the Associated Press.

The Bahamas would “promptly” extradite Bankman-Fried to America once the indictment is unsealed and authorities in the U.S. make a formal request, said Bahamian Attorney General Ryan Pinder.

Bankman-Fried has mostly remained in his Bahamian luxury compound in Nassau since the failure of his company, which is headquartered in The Bahamas. He has a right to contest his extradition, which could take time, but not likely stop his move to America.

His arrest came just a day before he was scheduled to testify in front of the House Financial Services Committee. The committee's chairwoman Maxine Waters said that she was “disappointed” that the American public, and customers of FTX would not get to see him testify under oath.

With an estimated net worth of $32 billion, Bankman-Fried was one of the world’s wealthiest people on paper and was a prominent personality in Washington. He donated millions of dollars toward political causes that were mostly left-leaning as well as Democratic political campaigns.

His firm even became the second-largest cryptocurrency exchange in the world, but that unraveled quickly last month. At the time, reports called into question the strength of his firm's balance sheet. FTX's customers moved to withdraw billions of dollars, but the firm could not meet all the requests. It happened because it apparently used its customers deposits to cover bad bets at the firm's former CEO's investment arm, Alameda Research.

Recently, he said that he did not “knowingly” misuse customers’ funds. He shared that he believed that his angry customers will eventually be made whole.

Testimony from current CEO, John Ray III, will still be heard by the House Financial Services Committee Tuesday. Ray took over FTX on Nov. 11, and he is a long-time restructuring specialist. He said in court filings that the financial conditions at the firm were worse than at Enron company.

Bahamian authorities intend to continue with their own probe into Bankman-Fried. The Bahamian Prime Minister Philip Davis in a statement that the Bahamas and America have a "shared interest in holding accountable all individuals associated with FTX who may have betrayed the public trust and broken the law."

Former FTX Chief Executive Sam Bankman-Fried
Former FTX Chief Executive Sam Bankman-Fried apologized for the collapse of the firm but said he didn't knowingly commit fraud. Photo by: Getty Images North America via AFP/Craig Barritt

© 2024 Latin Times. All rights reserved. Do not reproduce without permission.