The founder of the defunct cryptocurrency exchange FTX has been arrested in the Bahamas, and federal prosecutors in New York have filed charges.
“Earlier this evening, Bahamian authorities arrested Samuel Bankman-Fried at the request of the United States Government, based on a sealed indictment filed by the SDNY,” U.S. Attorney Damian Williams said in a tweet. “We anticipate that the indictment will be unsealed in the morning and will have more to say at that time.”
The specific charges were not made public. However, the Royal Bahamas Police Force stated in a news release that Bankman-Fried was arrested for “various financial offences against US laws, which are also offences against Commonwealth of The Bahamas laws.” According to the release, Bankman-Fried will appear in local court on Tuesday.
FTX was a global company with over 130 affiliates that enabled individual investors to trade cryptocurrencies, eventually becoming the third-largest exchange by volume. The company’s commercials featured famous people, and its logo was seen on an NBA stadium and MLB umpire uniforms.
This story was first reported by the New York Times and Coindesk.
Bankman-Fried was scheduled to appear before Congress on Tuesday morning, but that appearance has been cancelled, according to House Financial Services Committee Chairwoman Maxine Waters (D-CA).
Waters questioned the arrest’s timing.
“I am surprised to learn that Sam Bankman-Fried was arrested in the Bahamas at the request of the US Attorney for the Southern District of New York,” Waters said. “It’s past time to start the process of bringing Mr. Bankman-Fried to justice.” However, as the public is aware, my staff and I have been working hard over the last month to obtain Mr. Bankman-testimony.” Fried’s
“While Mr. Bankman-Fried must be held accountable, the American public deserves to hear directly from Mr. Bankman-Fried about the actions that have harmed over one million people and destroyed so many people’s hard-earned life savings,” she added. The public has been eagerly awaiting these answers under oath before Congress, and the timing of this arrest denies them this opportunity.”
In a recent tweet, Bankman-Fried stated that he would try to shed light on what caused the crypto exchange’s crash as well as his own failings as the former CEO.
“I still don’t have access to much of my professional or personal data.” So I won’t be able to say as much as I’d like, and I won’t be as helpful as I’d like,” Bankman-Fried said on Twitter. “I’ll do my best to assist during the hearing.”
A call to Bankman-spokesman, Fried’s Mark Botnick, was not returned immediately. Earlier in the day, Botnick confirmed that the FTX founder was represented by white-collar criminal defence attorney Mark S. Cohen, who did not immediately respond to USA TODAY’s inquiry.
Bankman-Fried was arrested around 6 p.m. local time, according to Bahamian Attorney General Ryan Pinder, and is being held in custody “pursuant to our nation’s Extradition Act.”
According to Bahamas Prime Minister Philip Davis, the two countries “share a common interest in holding accountable all individuals associated with FTX who may have betrayed public trust and broken the law.”
“While the US pursues criminal charges against SBF individually,” he said, “The Bahamas will continue its own regulatory and criminal investigations into the collapse of FTX, with the continued cooperation of its law enforcement and regulatory partners in the US and elsewhere.”
FTX has already been the subject of investigations by the United States Securities and Exchange Commission, which enforces civil regulations, and the United States Department of Justice, which can bring criminal charges. Concerns have also been expressed by state and international regulators about the company.
Bankman-Fried resigned as CEO of FTX in early November, and the company declared bankruptcy after being unable to pay all of the exchange’s customers who wanted their money back. According to bankruptcy filings, the company could affect more than one million people.
According to Yesha Yadav, a law professor at Vanderbilt University in Tennessee, FTX grew because it drew average people who wanted to invest in cryptocurrency but didn’t want to deal with the complicated process that often comes with a cryptocurrency trade.
A decade ago, crypto traders would have to download specific software and then find someone willing to sell their cryptocurrency, according to Yadav. She explained that on an exchange like FTX, a user would place an order and be given an IOU for the cryptocurrency they purchased. “From a user experience standpoint, that’s fantastic,” she said.
“It was well-regarded because it promised safety,” Yadav explained. “It promised consumer protection and cutting-edge products without some of the riskier aspects of cryptocurrency.”
Since Bankman-resignation, Fried’s John J. Ray III, an insolvency expert with 40 years of experience who also oversaw Enron during its bankruptcy due to accounting fraud, has served as the company’s CEO.
He wrote in written testimony prepared for the House Committee on Financial Services on Tuesday that cases involving corporate failures and allegations of criminal activity share many similarities, “ranging from gross mismanagement, excessive leverage, failures of internal controls, failures of external checks as a result of audit firm failures, or insufficient board governance.”
“But never in my career have I seen such an utter failure of corporate controls at every level of an organisation, from a complete failure of any internal controls or governance whatsoever,” he added.
Ray is still scheduled to testify before the House Financial Services Committee on Tuesday morning.
Prosecutors say FTX founder Sam Bankman-Fried was arrested in the Bahamas and indicted in New York.
The founder of the defunct cryptocurrency exchange FTX has been arrested in the Bahamas, and federal prosecutors in New York have filed charges.
“Earlier this evening, Bahamian authorities arrested Samuel Bankman-Fried at the request of the United States Government, based on a sealed indictment filed by the SDNY,” U.S. Attorney Damian Williams said in a tweet. “We anticipate that the indictment will be unsealed in the morning and will have more to say at that time.”
The specific charges were not made public. However, the Royal Bahamas Police Force stated in a news release that Bankman-Fried was arrested for “various financial offences against US laws, which are also offences against Commonwealth of The Bahamas laws.” According to the release, Bankman-Fried will appear in local court on Tuesday.
FTX was a global company with over 130 affiliates that enabled individual investors to trade cryptocurrencies, eventually becoming the third-largest exchange by volume. The company’s commercials featured famous people, and its logo was seen on an NBA stadium and MLB umpire uniforms.
This story was first reported by the New York Times and Coindesk.
Bankman-Fried was scheduled to appear before Congress on Tuesday morning, but that appearance has been cancelled, according to House Financial Services Committee Chairwoman Maxine Waters (D-CA).
Waters questioned the arrest’s timing.
“I am surprised to learn that Sam Bankman-Fried was arrested in the Bahamas at the request of the US Attorney for the Southern District of New York,” Waters said. “It’s past time to start the process of bringing Mr. Bankman-Fried to justice.” However, as the public is aware, my staff and I have been working hard over the last month to obtain Mr. Bankman-testimony.” Fried’s
“While Mr. Bankman-Fried must be held accountable, the American public deserves to hear directly from Mr. Bankman-Fried about the actions that have harmed over one million people and destroyed so many people’s hard-earned life savings,” she added. The public has been eagerly awaiting these answers under oath before Congress, and the timing of this arrest denies them this opportunity.”
In a recent tweet, Bankman-Fried stated that he would try to shed light on what caused the crypto exchange’s crash as well as his own failings as the former CEO.
“I still don’t have access to much of my professional or personal data.” So I won’t be able to say as much as I’d like, and I won’t be as helpful as I’d like,” Bankman-Fried said on Twitter. “I’ll do my best to assist during the hearing.”
A call to Bankman-spokesman, Fried’s Mark Botnick, was not returned immediately. Earlier in the day, Botnick confirmed that the FTX founder was represented by white-collar criminal defence attorney Mark S. Cohen, who did not immediately respond to USA TODAY’s inquiry.
Bankman-Fried was arrested around 6 p.m. local time, according to Bahamian Attorney General Ryan Pinder, and is being held in custody “pursuant to our nation’s Extradition Act.”
According to Bahamas Prime Minister Philip Davis, the two countries “share a common interest in holding accountable all individuals associated with FTX who may have betrayed public trust and broken the law.”
“While the US pursues criminal charges against SBF individually,” he said, “The Bahamas will continue its own regulatory and criminal investigations into the collapse of FTX, with the continued cooperation of its law enforcement and regulatory partners in the US and elsewhere.”
FTX has already been the subject of investigations by the United States Securities and Exchange Commission, which enforces civil regulations, and the United States Department of Justice, which can bring criminal charges. Concerns have also been expressed by state and international regulators about the company.
Bankman-Fried resigned as CEO of FTX in early November, and the company declared bankruptcy after being unable to pay all of the exchange’s customers who wanted their money back. According to bankruptcy filings, the company could affect more than one million people.
According to Yesha Yadav, a law professor at Vanderbilt University in Tennessee, FTX grew because it drew average people who wanted to invest in cryptocurrency but didn’t want to deal with the complicated process that often comes with a cryptocurrency trade.
A decade ago, crypto traders would have to download specific software and then find someone willing to sell their cryptocurrency, according to Yadav. She explained that on an exchange like FTX, a user would place an order and be given an IOU for the cryptocurrency they purchased. “From a user experience standpoint, that’s fantastic,” she said.
“It was well-regarded because it promised safety,” Yadav explained. “It promised consumer protection and cutting-edge products without some of the riskier aspects of cryptocurrency.”
Since Bankman-resignation, Fried’s John J. Ray III, an insolvency expert with 40 years of experience who also oversaw Enron during its bankruptcy due to accounting fraud, has served as the company’s CEO.
He wrote in written testimony prepared for the House Committee on Financial Services on Tuesday that cases involving corporate failures and allegations of criminal activity share many similarities, “ranging from gross mismanagement, excessive leverage, failures of internal controls, failures of external checks as a result of audit firm failures, or insufficient board governance.”
“But never in my career have I seen such an utter failure of corporate controls at every level of an organisation, from a complete failure of any internal controls or governance whatsoever,” he added.
Ray is still scheduled to testify before the House Financial Services Committee on Tuesday morning.
