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December 12, 2022 at 08:46 PM
Sam Bankman-Fried, the disgraced co-founder of digital-asset exchange FTX, was arrested in the Bahamas after the U.S. government filed a criminal indictment, following weeks of speculation that client funds were misused before his empire’s collapse.
Bankman-Fried is being held in custody pending an extradition process, the island nation’s attorney general, Ryan Pinder, said in a statement Monday.
Federal prosecutors in Manhattan plan to unseal the case against him Tuesday morning, “and will have more to say at that time,” Damian Williams, US attorney for the Southern District of New York, said in a separate statement. He didn’t elaborate on the allegations.
House Financial Services Committee Chairwoman Maxine Waters told reporters Monday that the panel still plans to hold its hearing on FTX’s collapse. “It’s important for the American public to understand FTX and what was going on,” she said.
Bankman-Fried has been facing investigations in the US and the Bahamas, where the company was headquartered, into a range of possible misconduct. One key inquiry has been whether customer funds were lent out to trading firm Alameda Research, which Bankman-Fried also founded.
More than 100 FTX-related entities filed for US bankruptcy protections on Nov. 11.
‘Powerful Evidence’
“To indict this early, when they didn’t have to, tells me that they have incredibly powerful evidence,” said Gene Rossi, a former federal prosecutor. Rossi added that prosecutors were probably “gravely concerned” that Bankman-Fried would flee to a jurisdiction where he could not be extradited.
The White House declined to comment on the arrest and charges.
House Financial Services Committee Chairwoman Maxine Waters told reporters the panel still plans to hold its hearing on FTX’s collapse. “It’s important for the American public to understand FTX and what was going on,” she said.
Bankman-Fried, 30, is being held at the Cable Beach police station in Nassau, according to an officer working at the facility. The person, who declined to give a name when reached by phone, said that all the cells there are comfortable, but didn’t provide details.
