Sam Bankman Fried, the creator of the defunct cryptocurrency exchange FTX, has reportedly been detained, according to the Bahamas Attorney General.
He is expected to appear in court in Nassau, the nation’s capital.
According to the police, Bankman Fried was detained for “financial offenses” that broke both Bahamian and American law.
Due to FTX’s US bankruptcy filing last month, many users were unable to access their money.
According to a lawsuit filed last month, FTX owes its 50 largest creditors an estimated $3.1 billion.
The number of people who have money on the stock market is unknown, and it is also unknown how much of their money may be returned to them after the conclusion of bankruptcy procedures, although many experts warn that this may only be a small portion of what they first invested.
Customers could swap fiat currency for cryptocurrencies like Bitcoin on the FTX market.
Bachman Fried served as the famed American investor Warren Buffett’s youthful role model. His net worth was above $15 billion as of the end of October.
He became well-known in Washington as a political fundraiser, funding politicians or mostly democratic organizations while purportedly advocating for pandemic prevention and improved cryptocurrency regulation.
Bankman-Fried will be detained “pursuant to the nation’s extradition statute,” according to a statement from the Bahamas Attorney General.
“Earlier this evening, Bahamas authorities detained Samuel Bankman Fried at the request of the United States Government and pursuant to an indictment filed by the judicial authority in the Southern District of New York,” the US Attorney’s Office in Manhattan noted in a tweet. We anticipate action. early in the morning to unseal the indictment.
According to Gurbir Grewal of the US Securities and Exchange Commission, “We appreciate the work of our colleagues in the arrest of Sam Bankman Fried in the Bahamas on federal criminal charges.”
In the Southern District of New York, “the Securities and Exchange Commission has separately approved action on charges connected to Bankman Fried’s breaches of our securities laws,” he continued.
On Tuesday, Bankman Fried was supposed to address the US Congress on the demise of the FTX exchange.
Congresswoman Maxine Waters, who expressed astonishment upon learning of his detention in a statement, stated that he will no longer be allowed to testify.
Bachman Fried, a former trader on Wall Street and a former employee of Google, launched FTX in 2019. It is the owner and operator of the cryptocurrency exchange FTX.com.
With daily bitcoin trades of around $10 billion, the exchange has grown to be the second largest in the world.
However, on November 11, FTX filed for bankruptcy protection as a result of customer withdrawals of $6 billion from the site in only three days and the decision of rival exchange Binance to withdraw from offering a bailout. Bankman Fried, the CEO of FTX, also left his post.
Bankman Fried recognized the firm had made mistakes but he made an effort to disassociate himself from claims of unlawful behavior.
“I didn’t intend to defraud anyone, and I don’t believe I defrauded anyone, and I didn’t want any of this to occur. I definitely didn’t have the skills I thought I did “he said .
FTX’s demise occurred in a challenging year for the cryptocurrency sector. In addition to other cryptocurrencies, Bitcoin has lost more than 60% of its value this year.