Former FTX CEO Sam Bankman-Fried has been arrested within the Bahamas, based mostly on fees filed within the U.S., the Office of the Attorney General of the Bahamas introduced Monday.
Bankman-Fried’s arrest “followed receipt of formal notification from the United States that it has filed criminal charges against SBF and is likely to request his extradition,” the legal professional normal’s workplace mentioned in an announcement.
The U.S. Attorney’s Office for the Southern District of New York confirmed Bankman-Fried was in custody, saying that the arrest was made based mostly on a sealed indictment. “We expect to move to unseal the indictment in the morning and will have more to say at that time,” the SDNY mentioned.
It was not instantly clear what the costs had been, because of the sealed indictment. The Associated Press beforehand reported that regulators and the Justice Department had been investigating whether or not FTX used buyer funds to again dangerous bets at Bankman-Fried’s hedge fund, Alameda Research.
FTX was one of many world’s largest cryptocurrency exchanges earlier than it collapsed final month. Users withdrew roughly $5 billion of crypto property in a single day as issues mounted over the trade’s solvency. Bankman-Fried resigned on November 11 and FTX filed for Chapter 11 chapter safety.
John Ray III, who took over as FTX CEO after an extended profession that included overseeing the Enron chapter, mentioned in court docket paperwork the next week, “Never in my career have I seen such a complete failure of corporate controls and such a complete absence of trustworthy financial information as occurred here.”
The court docket paperwork additionally accused Bankman-Fried and FTX of failing to precisely account for the worth of FTX’s crypto property and of disorganized administration of FTX’s money holdings.
“One of the most pervasive failures of the FTX.com business in particular is the absence of lasting records of decision-making,” Ray wrote. “Mr. Bankman-Fried often communicated by using applications that were set to auto-delete after a short period of time, and encouraged employees to do the same.”
Bankman-Fried’s arrest comes someday earlier than he had been anticipated to testify at a House listening to on the crypto trade’s collapse. He had mentioned final week he could be keen to testify earlier than Congress however warned his feedback could be restricted and “won’t be as helpful” as he’d wish to be. On Monday, simply a short while earlier than his arrest, Bankman-Fried mentioned in a Twitter Spaces occasion that he could be “calling in” to the listening to, Reuters reported.
Robert Legare, Pat Milton and Khristopher J. Brooks contributed reporting.