The founder of the ill-fated cryptocurrency platform FTX, Sam Bankman-Fried, arrested in the Bahamas, will be indicted by the U.S. Attorney’s Office for the District of New York on charges of wire fraud, securities fraud, securities fraud conspiracy and money laundering, the New York Times reported Tuesday
Bankman-Fried was arrested on Tuesday in the Bahamas after he was indicted by the U.S. Attorney for the Southern District of New York, Damian Williams
In a tweet, Williams reported that Bahamian authorities had arrested Bankman-Fried at the request of the Bahamian government USA, “on the basis of a secret indictment” filed by the prosecution of which no details were given.
USA Damian Williams: 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 SDNY. We expect to move to unseal the indictment in the morning and will have more to say at that time.
— US Attorney SDNY (@SDNYnews) December 12, 2022
The New York Times, citing a person with knowledge of the court proceeding as a source, unveiled on Tuesday the charges for which the platform’s founder has been indicted.
Bankman-Fried cooperated during the arrest
He further explained that Bankman-Fried cooperated during the arrest, according to a person familiar with the matter. He is scheduled to appear in the Magistrate’s Court in Nassau, the capital of the Bahamas.
In a statement published by the media, Bahamian Prime Minister Philip Davis said that his country and the U.S “have shared an interest in holding to account all individuals associated with FTX who may have betrayed the public trust and broken the law.”
FTX, in bankruptcy since November
FTX filed for bankruptcy on November 11th and at the end of that same month, the new managers of the company appeared for the first time before the bankruptcy court of the state of Delaware (USA) to begin the restructuring process.
Lawyers for the new management and its current head, John Ray, contend that a “substantial amount” of the company’s assets may have been stolen or are missing.
The new managers have also alleged that the company had a “total absence of corporate controls” and a lack of “reliable financial information.”
The platform, which came to be valued at $32 billion, could have more than one million creditors worldwide. So far, the company has admitted that it owes more than $3 billion to its top 50 creditors
However, Bankman-Fried blames the bankruptcy in part on the massive cryptocurrency sell-off that occurred earlier this year. For the company’s founder, that sale halved FTX’s collateral of about $30 billion
At that point, according to Bankman-Fried, the cryptocurrency sale continued, combined with a credit crunch and a “run on the bank,” which reduced collateral to 9 billion before FTX filed for bankruptcy.
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