Business

Founder of bankrupt crypto firm FTX arrested in Bahamas

Police in the Bahamas have arrested Sam Bankman-Fried, the founder of bankrupt crypto firm FTX.

The country’s attorney general said the Bahamas received formal notification from the US that criminal charges have been filed against him there – and it was likely there would be a request for his extradition.

FTX, the world’s second-largest cryptocurrency exchange, filed for bankruptcy protection in the US last month and Bankman-Fried resigned as chief executive, triggering a wave of public demands for greater regulation of the cryptocurrency industry.

The distressed crypto trading platform struggled to raise money to stave off collapse as traders rushed to withdraw $6bn (£4.89bn) from the platform in just 72 hours.

More than one million customers worldwide were using his platform to buy assets like Bitcoin.

Bankman-Fried – known as “SBF” – had become one of the biggest names in the crypto industry, with his company swooping in to save smaller firms after they were tipped into bankruptcy.

But in the space of just three days, a series of bombshell allegations led to the spectacular collapse of FTX and a bankruptcy of its own.

More on Cryptocurrencies

A spokesman for the US Attorney’s office in Manhattan, New York, confirmed Bankman-Fried had been arrested in the Bahamas but declined to comment on what the charges were.

According to Reuters news agency, Bankman-Fried says in a draft of his testimony he “deeply regrets giving in to pressure” to sign the bankruptcy filing forms.

It also says, Reuters reports, that “less than ten minutes after signing a document nominating [his successor] John Ray as CEO, he received a potential funding offer for billions of dollars”.

FILE - The FTX Arena logo is seen where the Miami Heat basketball team plays Nov. 12, 2022, in Miami. The former CEO of the failed cryptocurrency exchange FTX said Wednesday, Nov. 30, that he did not ...knowingly" misuse customers' funds, and claimed he believes his millions of angry customers will eventually be made whole. (AP Photo/Marta Lavandier, File)
Image:
Pic: Associated Press

FTX was set up to allow people to buy cryptocurrencies using their pounds and dollars. It was praised for its easy-to-use interface – and made money by charging small fees for each transaction.

In a series of interviews and public appearances in late November and December, Bankman-Fried acknowledged risk
management failures but denied accusations of fraud.

“SBF” became a prominent and unconventional figure known for his wild hair, t-shirts and shorts. He appeared on
panels with celebrity statesmen such as former US President Bill Clinton and former British Prime Minister Tony Blair as
well as with supermodel Gisele Bundchen.

He contributed $5.2 million (£4.23m) to President Joe Biden’s 2020 campaign and became one of the largest donors to Democratic political candidates.

He will appear in a Bahamas magistrates court on Tuesday.

Articles You May Like

London estate agent Dexters swoops on rival Marsh & Parsons in £25m deal
Flybe: Will I get a refund for my flight?
A new 3 GW power line will carry clean energy in the US Southwest
Haunting video of Tyre Nichols arrest is sickening indictment of policing that night
S Club 7 singer reveals she was homeless over Christmas