Founder Sam Bankman-Fried of the bankrupt crypto exchange FTX has been arrested in the Bahamas, the authorities have announced. The arrest follows the United States’ notification that it has launched criminal charges against Bankman-Fried, the island government said. He also said in a statement that he expects the United States to request his extradition.
“The Bahamas and the United States have a shared interest in holding accountable all individuals associated with FTX who may have violated public trust and violated the law,” said Prime Minister Philip Davis of the Bahamas. .
A spokesman for the US public prosecutor in New York confirmed to Reuters the arrest of Bankman-Fried, but declined to indicate any suspicions against him. According to him, they will probably be revealed on Tuesday.
Fraud investigation
The American justice department previously announced that it is investigating whether the entrepreneur has committed fraud. Prosecutors are focusing on transferring money to the Bahamas around the time of filing for bankruptcy protection, insiders previously told Bloomberg news agency.
FYX went bankrupt because the company did not have enough money to pay back users’ credits. This was partly because customer assets were transferred from FTX to investment fund Alameda, which was also owned by Bankman-Fried. There it got stuck in investments. Fraud may have been committed.
Possible market manipulation
There is also potential market manipulation. Bankman-Fried is said to have made several purchases and sales that led to the downfall of the TerraUSD cryptocurrency and the companies involved.
Bankman-Fried has admitted no guilt in a series of interviews. He states that there were too few checks and that he and his fellow directors had lost the overview.
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