Samuel Bankman-Fried. File

Gulf Today Report

A New York Attorney General announced that the Bahamas authorities arrested at the request of the US judiciary, Samuel Bankman-Fried, founder of the collapsed crypto-asset exchange FTX, in the Bahamas.

Bankman-Fried was arrested by Bahamas authorities at the request of the US government and pursuant to a sealed indictment issued by the Southern District of New York, Attorney General Damien Williams said in a tweet.

The Attorney General stated that new details regarding this case will be announced on Tuesday.

The former CEO of cryptocurrency firm FTX has been charged by the Securities and Exchange Commission with orchestrating a scheme to defraud investors.

The SEC complaint filed on Tuesday alleges that Bankman-Fried has raised more than $1.8 billion from equity investors since May 2019 by promoting FTX as a safe and responsible platform for trading crypto assets.

A month ago, Bankman did not stop participating in media interviews from the Bahamas, despite the risk of being prosecuted for financial fraud, after his company, whose value at the beginning of the year was $ 32 billion, went bankrupt overnight.

Bankman said that he refused his lawyer's advice to remain silent now, stressing that "it is my duty to explain what happened."

Ryan Bender, the Attorney General of the Bahamas, said in a statement posted on Twitter: "The United States has filed a complaint against the 30-year-old and will most likely request that we hand him over."

Philip Davis, Prime Minister of the Kingdom of the Bahamas, an archipelago located northeast of Cuba, said that both the United States and his country have an interest in bringing to justice individuals associated with FTX who may have betrayed public trust and broken the law.

He added in a statement that his country will conduct its own criminal investigation into the FTX collapse case.

Recently, Bankman said that he was shocked by the many details that were revealed when the cryptocurrency platform collapsed, stressing that the problems resulted from lax oversight and controls in the company and not from any fraudulent intent.

On November 11, FTX filed for bankruptcy while facing a severe liquidity shortage and a flood of withdrawals from panicked clients.

At the time, FTX took about $10 billion in client funds without permission, according to the Wall Street Journal.

Most of the attention focused on the relationship between FTX and Alameda Research, its trading subsidiary.

Bankman acknowledged that it was "embarrassing" that he did not pay sufficient attention to the conflicts of interest between the two companies, but insisted that he was not familiar with the details of Alameda and did not take over the management of the company.

According to Coindesk, a cryptocurrency news site, Alameda's balance sheet relied heavily on a cryptocurrency created by FTX that is not linked to any asset of independent value, the FTT.

Just ten days before its bankruptcy, FTX was considered the second largest cryptocurrency exchange in the world.