FTX founder Sam Bankman-Fried Got Arrested in the Bahamas
The former FTX cryptocurrency exchange's founder, Sam Bankman-Fried, has been arrested in the Bahamas, as per the country's attorney general.
On Tuesday, Sam Bankman-Fried will appear in a court in Nassau, the capital of the Caribbean nation. According to police, Mr Bankman-Fried was detained for "financial offences" under U.S. and Bahamas regulations. Last month, FTX declared bankruptcy in the United States, leaving many customers unable to retrieve their funds. According to a court filing, FTX owes about $3.1 billion (£2.5 billion) to its 50 biggest debtors.
Among the most severe charges against Mr Bankman-Fried is that he misused billions of dollars in client funds to prop up Alameda, his investment trading firm. It is unknown how much money individuals who have funds in the exchange will receive after the bankruptcy procedures are completed. In contrast, several experts have cautioned that it may be a tiny percentage of what they placed.
Mr Bankman-Fried admitted to the BBC earlier in the month that errors were made in the company. However, he attempted to disassociate himself from charges of illicit behaviour. In addition, he debunked allegations that he knew Alameda was using FTX customer funds.
The Downfall of FTX
FTX was the world's second-biggest crypto exchange, exchanging around $10 billion in cryptocurrencies daily. However, on November 11, FTX filed for bankruptcy after customers withdrew $6 billion from the network in 3 days and competitor crypto exchange Binance ditched a rescue arrangement. Around the same period, Mr Bankman-Fried resigned as CEO of FTX.
The demise of FTX occurred amid a turbulent year for the crypto sector. Bitcoin has lost over 60% of its value this year, and other cryptos have also suffered. FTX was the third cryptocurrency exchange to declare bankruptcy this year, after Celsius Network and Voyager Digital. The sources claim that out of FTX's total $16 billion in customer assets, the company has given a loan of roughly $8 billion to its subsidiary firm, Alameda.