FTX founder arrested in Bahamas after US charges

FTX founder Sam Bankman-Fried was arrested in the Bahamas on Monday at the request of the US Attorney’s Office, a day before he was scheduled to testify before the US Congress about the abrupt bankruptcy last month of one of the largest trading platforms. world cryptocurrency exchange.

The arrest marks a stunning fall from grace for the 30-year-old businessman, known by his initials SBF, who became a billionaire thanks to the rise of bitcoin and other digital assets until the quick demise of FTX.

The platform, launched in 2019 and based in the Bahamas, filed for bankruptcy on November 11 after it failed to raise money to avoid bankruptcy as operators rushed to withdraw $6 billion from its services. in just 72 hours.

Since then, Bankman-Fried has been known to secretly use $10 billion in client funds to prop up its crypto-asset exchange business.

The arrest came as Bankman-Fried prepared to lash out at his former Sullivan and Cromwell lawyers, new FTX CEO John Ray, and rival exchange operator Binance in a hearing before the US Congress.

At the hearing, a draft of which has been seen by Reuters, Bankman-Fried planned to say that he was pressured by lawyers for Sullivan and Cromwell to appoint Ray as chief executive officer after the sudden exodus of client funds. When he changed his mind within minutes, following an offer of billions of dollars of fresh financing, he was told it was too late.

Bankman-Fried will not be able to appear, according to Congresswoman Maxine Waters, who in a statement expressed surprise at his arrest. Ray’s testimony will continue.

Bankman-Fried was arrested shortly after 6 pm Monday (2300 GMT) at his apartment complex, a luxurious gated community called Albany, and will appear in a magistrate’s court on Tuesday, Bahamian police said. The Bahamas attorney general’s office said it expects him to be extradited to the United States.

A spokesman for the US attorney’s office in Manhattan confirmed that Bankman-Fried had been detained in the Bahamas, but declined to comment on the charges.