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Sam Bankman-Fried, the founder of FTX, was arrested in Hamas

He will appear in a magistrate’s court in the Caribbean nation’s capital, Nassau, on Tuesday. Police said Mr. Bankman-Fried, 30, had been arrested for “financial offenses” against laws in the US and The Bahamas. Last month, FTX filed for bankruptcy in the US. Many users were unable to withdraw their funds. According to court filings, FTX owes around $3.1bn (£2.5bn) to its 50 largest creditors.

of the most serious allegations against Mr. Bankman-Fried is that he used billions of dollars in customer funds to prop up his investment firm, Alameda. It’s unclear how much people holding funds on the exchange will get back at the end of the bankruptcy process — though many experts warn it could be a fraction of what they deposited. Speaking to the BBC earlier this month, Mr. Bankman-Fried admitted mistakes had been made at the firm but sought to distance himself from allegations of illegal activity.

“I didn’t knowingly cheat. I don’t think I cheated, I didn’t want any of this to happen. I’m definitely not as capable as I thought I was,” he told the BBC. He also denied allegations that he knew Alameda was using FTX customer funds. “That’s not true,” said Mr. Bankman-Fried, who acknowledged that as chief executive he was ultimately responsible for any mismanaged funds. “It’s on me, one way or another,” he said. The FTX exchange allowed customers to trade regular money for cryptocurrencies such as Bitcoin.

Sam Bankman-Friedba, the founder of FTX, was arrested in Hamas
Sam Bankman-Friedba, the founder of FTX, was arrested in Hamas

Cryptocurrencies are not currencies in the traditional sense but are stored online and act as investment instruments or securities – often with high levels of volatility. Their anonymity means they are amenable to criminal activity such as drug trafficking and ransomware attacks, but their supporters say there is huge potential for innovation and independence from governments. Mr. Bankman-Fried was once considered a younger version of legendary US investor Warren Buffett, and as recently as the end of October had a net worth of more than $15bn.

Before FTX’s collapse, he was happy to give his Twitter followers an insight into his lifestyle, which included playing League of Legends during phone calls, trying to woo investors, and sleeping on a beanbag next to his desk at work. He is a well-known political donor in Washington DC, mostly to Democratic politicians or groups, supporting epidemic prevention and better crypto regulation. Mr. Bankman-Fried will be detained “under our nation’s extradition law,” the Bahamas attorney general said in a statement.

“Earlier this evening, Bahamian authorities arrested Samuel Bankman-Fried at the request of the US government based on a sealed indictment filed by the SDNY Southern District of New York. We expect to unseal the indictment in the morning. We will announce at that time,” the US Attorney’s Office in Manhattan said in a statement. said in the tweet. Wall Street regulators also said they would take action against Mr. Bankman-Fried.

“We appreciate the law enforcement partners involved in the arrest of Mr. Sam Bankman-Fried in the Bahamas on federal criminal charges,” US Securities and Exchange Commission official Gurbir Grewal said in a statement. “Separately authorized charges will be publicly filed tomorrow in the Southern District of New York by the Securities and Exchange Commission in connection with Mr. Bankman-Fried’s alleged violations of our securities laws,” he added. Mr. Bankman-Fried is due to testify before the US Congress on Tuesday about the collapse of FTX.

However, he will no longer be able to testify, according to Congresswoman Maxine Waters, who said in a statement that she was surprised to hear of his arrest. Mr. Bankman-Fried’s lawyer did not immediately reply to a BBC request for comment. It has become the second largest crypto exchange in the world, trading around $10 billion worth of cryptocurrencies per day. But on November 11, FTX filed for bankruptcy protection after users pulled $6 billion from the platform in three days, leaving rival exchange Binance in a rescue deal.

At the same time, Mr. Bankman-Fried resigned as chief executive of FTX. FTX’s collapse comes amid a tumultuous year for the cryptocurrency industry. Bitcoin has lost more than 60% of its value this year, while other cryptocurrencies have also declined.


I am Naveen. I am a content creator. I have been writing content for different bloggers past 3 years. I am interested in Technology related news.

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