Video above: Crypto exchange FTX files for bankruptcySam Bankman-Fried, the founder of failed crypto exchange FTX, was arrested in the Bahamas on Monday after U.S. prosecutors filed criminal charges against him, according to a statement from the government of the Bahamas.The Southern District of New York, which is investigating Bankman-Fried and the collapse of FTX and its sister trading firm Alameda, confirmed his arrest on Twitter.”Earlier this evening, Bahamian authorities arrested Samuel Bankman-Fried at the request of the US government, based on a sealed indictment filed by the SDNY,” wrote U.S. attorney Damian Williams. “We expect to move to unseal the indictment in the morning and will have more to say at that time.”A representative for Bankman-Fried’s legal team didn’t immediately respond to CNN’s request for comment. It’s unclear what charges await Bankman-Fried, the 30-year-old crypto celebrity who became a pariah overnight last month as his company suffered a liquidity crisis and filed for bankruptcy, leaving at least a million depositors unable to access their funds.Bankman-Fried has since sought to cast himself as a somewhat hapless chief executive who got out over his skis, while denying accusations that he defrauded FTX’s customers.”I didn’t knowingly commit fraud,” he told the BBC over the weekend. “I didn’t want any of this to happen. I was certainly not nearly as competent as I thought I was.”Bankman-Fried was scheduled Tuesday to appear virtually before the U.S. House Financial Services Committee, which is demanding answers about how the company came crashing down, ricocheting throughout the digital asset ecosystem. Several crypto companies have halted operations, freezing customer accounts and in some cases filing for bankruptcy themselves because of their exposure to FTX.Also set to testify Tuesday was FTX’s new CEO, John J. Ray III, who took over for Bankman-Fried on Nov. 11 and is tasked with shepherding it through the bankruptcy process.Ray has so far painted a picture of a crypto empire with virtually no corporate controls and a shocking lack of financial and other record-keeping.”The scope of the investigation underway is enormous,” Ray said in prepared remarks released Monday ahead of his testimony.While the probe isn’t completed, Ray said, FTX’s collapse appears to stem from the concentration of power “in the hands of a very small group of grossly inexperienced and unsophisticated individuals” who failed to implement virtually any corporate controls.Ray also states as fact that “customer assets from FTX.com were commingled with assets from the Alameda trading platform.” That’s a key issue for investigators, as FTX and Alameda were, on paper, separate entities.Bankman-Fried has denied knowingly commingling funds and sought to distance himself from the day-to-day management of Alameda, which made a number of high-risk trading strategies such as arbitrage and “yield farming,” aka investing in digital tokens that pay interest-rate-like rewards, according to reporting from The Wall Street Journal.”I was frankly surprised by how big Alameda’s position was,” Bankman-Fried said at the New York Times’ DealBook Summit late last month.
Video above: Crypto exchange FTX files for bankruptcy
Sam Bankman-Fried, the founder of failed crypto exchange FTX, was arrested in the Bahamas on Monday after U.S. prosecutors filed criminal charges against him, according to a statement from the government of the Bahamas.
The Southern District of New York, which is investigating Bankman-Fried and the collapse of FTX and its sister trading firm Alameda, confirmed his arrest on Twitter.
“Earlier this evening, Bahamian authorities arrested Samuel Bankman-Fried at the request of the US government, based on a sealed indictment filed by the SDNY,” wrote U.S. attorney Damian Williams. “We expect to move to unseal the indictment in the morning and will have more to say at that time.”
A representative for Bankman-Fried’s legal team didn’t immediately respond to CNN’s request for comment.
It’s unclear what charges await Bankman-Fried, the 30-year-old crypto celebrity who became a pariah overnight last month as his company suffered a liquidity crisis and filed for bankruptcy, leaving at least a million depositors unable to access their funds.
Bankman-Fried has since sought to cast himself as a somewhat hapless chief executive who got out over his skis, while denying accusations that he defrauded FTX’s customers.
“I didn’t knowingly commit fraud,” he told the BBC over the weekend. “I didn’t want any of this to happen. I was certainly not nearly as competent as I thought I was.”
Bankman-Fried was scheduled Tuesday to appear virtually before the U.S. House Financial Services Committee, which is demanding answers about how the company came crashing down, ricocheting throughout the digital asset ecosystem. Several crypto companies have halted operations, freezing customer accounts and in some cases filing for bankruptcy themselves because of their exposure to FTX.
Also set to testify Tuesday was FTX’s new CEO, John J. Ray III, who took over for Bankman-Fried on Nov. 11 and is tasked with shepherding it through the bankruptcy process.
Ray has so far painted a picture of a crypto empire with virtually no corporate controls and a shocking lack of financial and other record-keeping.
“The scope of the investigation underway is enormous,” Ray said in prepared remarks released Monday ahead of his testimony.
While the probe isn’t completed, Ray said, FTX’s collapse appears to stem from the concentration of power “in the hands of a very small group of grossly inexperienced and unsophisticated individuals” who failed to implement virtually any corporate controls.
Ray also states as fact that “customer assets from FTX.com were commingled with assets from the Alameda trading platform.” That’s a key issue for investigators, as FTX and Alameda were, on paper, separate entities.
Bankman-Fried has denied knowingly commingling funds and sought to distance himself from the day-to-day management of Alameda, which made a number of high-risk trading strategies such as arbitrage and “yield farming,” aka investing in digital tokens that pay interest-rate-like rewards, according to reporting from The Wall Street Journal.
“I was frankly surprised by how big Alameda’s position was,” Bankman-Fried said at the New York Times’ DealBook Summit late last month.
