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Bahamas arrest Sam Bankman-Fried: FTX

Washington: Authorities in the Bahamas have arrested embattled FTX crypto exchange founder Sam Bankman-Fried at the request of the US, the country’s attorney general announced Monday. 

As a result of the notification received and the material provided therewith, it was deemed appropriate for the Attorney General to seek SBF’s arrest and hold him in custody pursuant to our nation’s Extradition Act,” the office of The Bahamas Attorney General Ryan Pinder said in press release.

Meanwhile, the US Securities and Exchange Commission (SEC) separately authorized charges relating to FTX founder Sam Bankman-Fried’s violations of securities laws, the regulator said.

“The Securities and Exchange Commission has separately authorized charges relating to Mr. Bankman-Fried’s violations of our securities laws, which will be filed publicly tomorrow in the Southern District of New York,” SEC official Gurbir Grewal said in a statement.

The Bahamas prime minister’s office shared news of the arrest, as well as a police statement saying Bankman-Fried was arrested in the early evening at his apartment complex in the capital Nassau.

US Attorney for the Southern District of New York Damian Williams also confirmed the arrest in a Twitter post.   

FTX, which had been among the world’s largest cryptocurrency exchanges, filed for bankruptcy protection on November 11 in one of the highest-profile crypto blowups after traders pulled $6 billion (€5.7 billion) from the platform in three days.

Bankman-Fried resigned as FTX’s chief executive officer the same day as the bankruptcy filing.

As much as anyone, Bankman-Fried had embodied the apparent emergence of cryptocurrency as an above-board investment and no longer a frowned on get-rich-quick scheme shunned by the banking establishment.

His FTX platform was plugged by celebrities in advertising campaigns and the cyber whiz kid became a regular presence in Washington where he donated tens of millions of dollars in political contributions.

But after reaching a valuation of $32 billion, FTX’s implosion was swift following a November 2 report on ties between FTX and Alameda, a trading company also controlled by Bankman-Fried.

The report exposed that Alameda’s balance sheet was heavily built on the FTT currency — a token created by FTX and with no independent value.

In a series of interviews and public appearances in late November and December, Bankman-Fried acknowledged risk management failures but said he did not commit fraud while running the company.

FTX’s demise marked the latest turmoil for the crypto industry this year. The overall crypto market has slumped amid a string of meltdowns that have taken down other key players including Voyager Digital and Celsius Network.

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