Fall from grace: Crypto's golden boy Sam Bankman-Fried arrested in Bahamas

Bankman-Fried was due to testify about the collapse of his cryptocurrency platform FTX before the US Congress on Tuesday.
Deena Theresa
Sam Bankman-Fried.
Sam Bankman-Fried.

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Sam Bankman-Fried, the former CEO of the collapsed cryptocurrency exchange platform FTX, was arrested by Bahamian authorities on December 12 after US prosecutors filed criminal charges, the US Attorney's Office Southern District of New York confirmed on Twitter.

Bankman-Fried was arrested at his apartment complex, in Nassau, Bahamas, and is scheduled to appear on Tuesday in a magistrates court in Nassau. The US prosecutors also added that an indictment would be unsealed on the day.

Charges leveled against the CEO include wire fraud, wire fraud conspiracy, securities fraud, money laundering

A statement from The Bahamas Police said that Bankman-Fried has been arrested in reference to "various financial offenses against laws of the United States, which are also offenses against laws of the Commonwealth of The Bahamas."

According to The New York Times, the charges against Bankman-Fried included wire fraud, wire fraud conspiracy, securities fraud, securities fraud conspiracy, and money laundering, a source familiar with the issue said.

The source added that Bankman-Fried cooperated during the arrest and will be held overnight in a cell at a police station.

Lawyers involved in the case 'surprised' by the arrest

The latest development wasn't unprecedented. Earlier this month, IE reported that various sources, including CNBC and Federal Law Enforcement agencies, were building a case to level both civil and criminal charges and private lawsuits from millions of FTX creditors against the disgraced founder.

Despite the anticipation, lawyers part of the case were surprised at the immediacy of the arrest. Earlier it was confirmed that Bankman-Fried was to testify remotely about the FTX collapse in a hearing before the House Financial Services Committee on Tuesday. Now, however, the hearing will go ahead, but without the CEO's testimony.

Bankman-Fried was to appear for a testimony on Tuesday

Representative Maxine Waters, Chair of the House Financial Services Committee, expressed her surprise following Bankman-Fried's arrest. "I have been working diligently for the past month to secure Mr. Bankman-Fried’s testimony before our Committee tomorrow morning. We received confirmation this afternoon from Mr. Bankman-Fried and his lawyers that he was still planning to appear before the Committee tomorrow, but then he was arrested," Waters said in a statement issued.

Waters added that the American public needed to hear directly from the founder about "the actions that’ve harmed over one million people and wiped out the hard-earned life savings of so many. The public has been waiting eagerly to get these answers under oath before Congress, and the timing of this arrest denies the public this opportunity".

Former Wall Street trader Bankman-Fried founded FTX along with ex-Google employee Gary Wang in 2019. Though the cryptocurrency exchange platform was the second largest crypto exchange in the world, the company filed for bankruptcy protection last month after users pulled $6bn from the platform in three days. There were even claims that alleged FTX was a high-tech Ponzi scheme.

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