FTX’s Crypto Boss, Sam Bankman-Fried, Arrested Amid Plans To Start New Business

Bahamas authorities have arrested the founder and former chief executive officer (CEO) of Futures Exchange (FTX), Sam Bankman-Fried, after cryptocurrency investors lost billions.

Bankman-Fried had operated FTX as a cryptocurrency exchange that offers investable crypto-assets in exchange for cash, and also served as a digital bank for crypto investors.

The company collapsed in November after accusations of misusing or diverting investors’ funds. The company was also alleged to have been involved in securities fraud conspiracy and money laundering. 

Last month, after his inability to sell FTX to Binance, owned by Zhao Changpeng, which would have provided liquidity for his company, Bankman-Fried filed for bankruptcy. This came months after he tried to buy Twitter with Elon Musk.

With an investigation hanging over his head, and at least $1 billion of customer funds disappearing after the collapse of FTX, the US requested for his arrest in Bahama, where he resided.

Also, it was alleged by Motley Fool that FTX may have shifted as much as $10 billion in customer funds to Alameda Research based on reports from Wall Street Journal and other news outlets. 

US Attorney of the Southern District of New York (SDNY), Damian Williams, confirmed Bankman-Fried’s arrest on Monday. His arrest was made possible due to the extradition treaty between U.S. and the Bahamas. 

Williams wrote on Twitter, “Earlier this evening, Bahamian authorities arrested Samuel Bankman-Fried at the request of the U.S. Government, based on a sealed indictment filed by the SDNY. 

“We expect to move to unseal the indictment in the morning and will have more to say at that time.” 

What you need to know

Three days ago, Bankman-Fried told the BCC that he is willing to testify in front of the United States House committee on financial services on December 13, 2022, which is investigating his company. 

Bankman-Fried also revealed that he is ready to do anything to raise funds to repay investors, even if it means starting a new venture. 

“I’m going to be thinking about how we can help the world and if users haven’t gotten much back, I’m going to be thinking about what I can do for them. 

“And I think at the very least I have a duty to FTX users to do right by them as best as I can. I would give anything to be able to do that. And I’m going to try if I can.”