Royal Bahamas Police Arrests Ex-FTX Founder Sam Bankman-Fried

Bankman-Fried will not be able to testify now, according to Congresswoman Maxine Waters, who was surprised to hear about his arrest.

Former FTX founder and CEO Sam Bankman-Fried was arrested by the Royal Bahamas Police Force on Monday (December 12) at his apartment complex in a luxury gated community known as Albany. He was taken into police custody at the behest of US prosecutors, says a report by news agency Reuters. The arrest took place a day before Banmkan was scheduled to testify before Congress about the spectacular collapse of the FTX Crypto Exchange firm in November this year (2022). His arrest comes as a big fall from a very successful career trajectory in the cryptocurrency industry.

The Bahamian police said he will be produced before the magistrate court on Tuesday. The attorney general's office of Bahamas said that he is expected to be extradited to the US. The US Attorney's office in Manhattan has confirmed Bankman-Fried's arrest without commenting on the charges leveled against him.

On an official Twitter page, the US Attorney said, "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."

Bankman-Fried was arrested by the police just when he was about to lash out at his former lawyers at Sullivan and Cromwell, current FTX CEO John Ray, and rival exchange firm Binance at a Congressional hearing, reported Reuters.

According to the draft copy of a testimony, Bankman-Fried was going to state that the Sullivan and Cromwell lawyers put a lot of pressure on him to nominate Ray as the company CEO after the abrupt shortage of customer funds.

Bankman said less than 10 minutes after he had signed the documents to nominate Ray as the CEO of FTX on November 10, he was offered "a potential funding offer for billions of dollars." He asked his counsel to cancel the appointment just a few minutes later, but he was informed that "it was too late to do so."

Thereafter, he has not been in touch with the FTX system. He also alleged that Ray did not respond to his emails when Bankman offered to provide additional help and information.

Bankman-Fried has stated that he thinks he does not have any criminal liability. Earlier in November, he had said, "I didn't ever try to commit fraud." However, in his written testimony, he said, "I would like to start by formally stating, under oath: I messed up."

All of these happened after the FTX filed for bankruptcy on November 11, following the total collapse of the firm as traders rushed to withdraw $6 billion from the agency within 72 hours. The media reported that Bankman Fried secretly used about $10 billion of customer funds to help his trading business.

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