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FTX cryptocurrency exchange founder Sam Bankman-Fried arrested in Bahamas

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Sam Bankman Freed, who founded and led FTX until the Bahamas-based cryptocurrency exchange was forced to declare bankruptcy, was arrested in the Bahamas on Monday.

The Bahamas Attorney General’s Office said it had moved forward with the arrest after receiving formal confirmation of the charges against Bankman-Fried, adding that it expected him to be extradited to the United States.

A spokesperson for the federal attorney’s office in Manhattan confirmed Bankman-Fried was arrested in the Bahamas, but declined to comment on the charges.

“Earlier this evening, Bahamian authorities arrested Samuel Bankman-Fried at the request of the U.S. government based on a sealed indictment filed by the U.S. Attorney’s Office for the Southern District of New York,” U.S. prosecutor Damian Williams said in a statement. “We plan to open the indictment in the morning, and we’ll have a lot more to say at that point.”

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Bankman-Fried attorney Mark Cohen did not immediately respond to a request for comment.

FTX, one of the world’s largest cryptocurrency exchanges, has become one of the most high-profile cryptocurrencies after traders pulled $6 billion from its platform in three days and rival exchange Binance abandoned bailout trading. It filed for bankruptcy protection on November 11, one of the big crashes.

A liquidity crisis erupted after Bankman-Fried secretly transferred $10 billion of FTX client money to Alameda, Reuters reported, citing two people familiar with the matter. At least $1 billion in customer funds have been lost, according to people familiar with the matter.

Bankman-Fried told Reuters that the company did not “secretly transfer” but misread “confusing internal labeling”. When asked about the missing funds, he replied “???”

In a series of interviews and public appearances at the end of November and December, Bankman-Fried admitted to failing to manage risk, but tried to distance himself from the accusations of fraud, claiming that FTX’s customer funds and his proprietary trading He said he never deliberately mixed funds for his company, Alameda Research. .

“I have never attempted any fraud,” Bankman-Fried said in an interview at the New York Times’ Dealbook Summit on November 30, adding that he personally does not consider himself criminally responsible. rice field.

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Bankman-Fried stepped down as CEO of FTX on the same day it filed for bankruptcy.

The Manhattan federal attorney’s office, led by veteran securities fraud prosecutor Williams, opened an investigation in mid-November into how FTX handled customer funds, a source familiar with the investigation told Reuters.

The Securities and Exchange Commission and the Commodity Futures Trading Commission have also launched investigations.

US crypto investors also sued Bankman-Fried, claiming that he and a number of celebrities who promoted FTX engaged in fraudulent activities that cost investors $11 billion.

Bankman-Fried was scheduled to testify remotely Tuesday before the U.S. House of Representatives Financial Services Committee hearings investigating the company’s bankruptcy.

The demise of FTX marked the latest turmoil in the cryptocurrency industry this year. The entire crypto market crashed amid a series of meltdowns that took down major players such as Voyager Digital and Celsius Network.

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