FTX founder Bankman-Fried arrested in Bahamas after US files charges

SBF was due to testify before US Congress about the crypto exchange’s sudden crash last month, which sent shockwaves through the industry.

FTX founder Sam Bankman-Fried, or SBF, has been arrested in the Bahamas at the direction of US authorities.

The arrest took place yesterday (12 December), the day before he was due to testify before US Congress about the crypto exchange’s sudden crash.

FTX collapsed last month, falling into bankruptcy and owing billions to its top creditors. There were also reports of missing funds, along with claims that SBF secretly transferred $10bn of customer funds from FTX to his trading company Alameda.

The crypto exchange had grown significantly since its founding by SBF in 2019, reaching a valuation of $18bn in a 2021 funding round backed by major tech investors such as SoftBank and Sequoia.

Speaking about the arrest, US representative Maxine Waters said “it’s about time” that the process to bring SBF to justice has begun. However, she raised issues with the timing of the arrest, interrupting his chance to testify before Congress.

“Although Mr Bankman-Fried must be held accountable, the American public deserves to hear directly from Mr Bankman-Fried about the actions that’ve harmed over 1m people and wiped out the hard-earned life savings of so many,” Waters said.

“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. While I am disappointed that we will not be able to hear from Mr Bankman-Fried tomorrow, we remain committed to getting to the bottom of what happened.”

Some of the criminal charges against SBF include wire fraud, wire fraud conspiracy, securities fraud, securities fraud conspiracy and money laundering, a person with knowledge of the matter told the New York Times.

The US Securities and Exchange Commission also said on Twitter that it has authorised separate charges relating to SBF’s “violations of securities laws”, which will soon be filed publicly in the Southern District of New York.

FTX had more than 1m users on its mobile and desktop platforms at its peak and made more than $1bn in revenue last year, according to 2022 statistics.

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