Sam Bankman-Fried, an American entrepreneur, businessman, and former billionaire, was detained in the Bahamas after US prosecutors filed criminal charges against him.
Sam Bankman-Fried, the former CEO of FTX, was detained on Monday in the Bahamas based on allegations brought in the United States. Several charges of wire fraud and conspiracy in relation to the failure of his crypto exchange are among the federal accusations that were revealed on Tuesday morning.
The Office of the Attorney General of the Bahamas stated in a statement issued on Monday that Fried’s arrest is following the receipt of formal information from the USA that it has brought criminal charges against Fried and is likely to request his extradition.
Fried was taken into custody, according to the U.S. Attorney’s Office for the Southern District of New York, which also noted that the arrest was undertaken in accordance with a sealed indictment.
Seven charges, including wire fraud and conspiracy to commit wire fraud against lenders and customers, securities fraud, conspiracy to commit money laundering, and infringements of campaign finance laws, were included in the grand jury’s indictment against Fried.
The Justice Department and federal regulators were looking into whether FTX utilized client cash to support risky wagers at Fried’s hedge company, Alameda Research.
The Department of Justice is exploring charges against Binance, the top exchange in the cryptocurrency market, at the same time as US officials have indicted Bankman-Fried. According to Reuters, some Justice Department officials think they have enough evidence in their extensive investigation of Binance to bring charges against the firm and some of its top executives.
According to Reuters, Binance is being looked at for potential money laundering and sanctions violations. Four people with knowledge of the situation told Reuters that other department members have argued in favor of devoting time to reviewing further evidence.
Additionally, the arrest occurred a day before Fried was supposed to testify before American lawmakers on Tuesday and provide testimony via video link.
According to Reuters, Bankman-Fried surreptitiously transferred $10 billion in FTX customer money to his private trading company, Alameda Research, which led to FTX’s liquidity crisis.
Sam Bankman-Fried attempted to separate himself from allegations of fraud in a series of statements and media interviews acknowledging risk management problems but claiming he never purposefully mixed customer assets on FTX with assets at Alameda.
Before it shut down last month, FTX was among the biggest crypto exchanges in the world. In a single day, users withdrew around $5 billion worth of cryptocurrency as worries about the exchange’s viability grew. On November 11, Bankman-Fried submitted his resignation, and FTX declared Chapter 11 bankruptcy.
Additionally, Bankman-Fried was sued by American cryptocurrency investors who claimed that he and numerous celebrities who advocated FTX used misleading tactics, causing the investors to lose $11 billion in losses.
The collapse of FTX was the latest upheaval for the cryptocurrency market this year. A string of meltdowns that have brought down other significant players like Voyager Digital and Celsius Network has caused the total cryptocurrency market to decline.
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