FTX’s Sam Bankman-Fried arrested in Bahamas, charges pending in U.S.

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Sam Bankman-Fried, founder of the cryptocurrency exchange FTX, which suffered a colossal collapse this year, was arrested in the Bahamas on Monday. He is now facing criminal charges in the United States, according to a Bahamian official.

The Attorney General of the Bahamas, through spokesman Latrae Rahming, posted a statement on Twitter detailing the arrest. Bankman-Fried, commonly known as SBF, lives in the Bahamas, where the cryptocurrency exchange was also based.

“SBF’s arrest followed receipt of formal notification from the United States that it has filed criminal charges against SBF and is likely to request his extradition,” the statement reads.

The U.S. Attorney for the Southern District of New York later tweeted that his office had filed a sealed indictment, which led to the arrest.

“We expect to move to unseal the indictment in the morning and will have more to say at that time,” Damian Williams said in a tweet from the office’s official Twitter account.

The Securities and Exchange Commission and the Justice Department are investigating the company, and the New York Times reported last week that Manhattan-based federal prosecutors are investigating whether Bankman-Fried steered prices of cryptocurrencies TerraUSD and Luna to benefit FTX and his Alameda hedge fund.

FTX, one of the largest cryptocurrency exchanges in the world, filed for bankruptcy protection in November, and Bankman-Fried resigned as CEO. In fact, more than 100 FTX-related entities filed for US bankruptcy protections on Nov. 11. 

The former chief executive of FTX was expected to testify remotely in front of a House Financial Services Committee panel on Tuesday. He was called to appear before the criminal charges were announced.

The new CEO of FTX, John J. Ray III, is expected to testify in front of members of Congress on Tuesday, and in prepared remarks released Monday, he said that Bankman-Fried’s management of FTX was an “utter failure” that lacked any level of financial control.

Lawmakers expressed some frustration that criminal charges would now take precedence.

“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 one million people, and wiped out the hard-earned life savings of so many,” said Rep. Maxine Waters, Democrat of California, and chairwoman of the House Financial Services Committee, in a statement Monday night.

“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,” she said, expressing her hope that Ray’s testimony will be crucial to the panel’s own investigation.

A copy of Bankman-Fried’s prepared remarks for the congressional panel was obtained by Bloomberg News, which tweeted some of the remarks, including a blunt consession from the former exec.

“I would like to start by formally stating under oath: I f—-ked up,” Bankman-Fried reportedly said in the draft copy.

SBF added that the company’s new leadership, led by Ray, has repeatedly rebuffed his offers to help sift through the wreckage of the crypto empire. Ray has not responded to five emails, he said, according to the report.

MarketWatch’s Robert Schroeder contributed to this article.

This article was originally published by Marketwatch.com. Read the original article here.

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