Sam Bankman-Fried, the founder and former CEO of collapsed cryptocurrency exchange FTX has been arrested in the Bahamas.
The arrest followed a request from the US government, Reuters reported late Monday.
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According to the latest on the developing story, the disgraced former FTX chief is also set to be swiftly extradited to the US, with his arrest coming on the eve of a planned House Financial Services Committee hearing set for 13 December.
The FTX Token (FTT/USD), which had already lost much of its value following the firm’s collapse, fell another 10% on Tuesday morning as the arrest story broke.
US files criminal charges against SBF
FTX began to unravel in late October following a bank run on the crypto firm, with allegations of massive fraud and other criminal activities levelled at Bankman-Fried and top executives at both FTX and its quant trading firm Alameda Research.
The crypto exchange had been one of the largest in the industry till its collapse shocked the crypto world. FTX filed for bankruptcy on 11 November 2022, with industry anger directed at SBF for his apparent fraudulent deals involving customer funds.
His arrest in the Bahamas follows investigations and widespread calls for him to be held responsible for what could be one of the world’s biggest financial scandals. According to reports, the US is looking to unseal criminal charges against the former FTX boss on Tuesday.
Among charges facing Bankman-Fried are wire fraud, conspiracy to commit wire fraud, securities fraud, securities fraud conspiracy and money laundering.
The ex-FTX CEO will not now testify before the House Financial Services Committee on Tuesday, but his arrest will likely see more come to light regarding the exchange’s implosion. And he faces prison time if prosecutors prove their case against him.