Sam Bankman-Fried, the fallen cryptocurrency star and former head of the FTX platform, was arrested on Monday in the Bahamas at the request of US authorities, announced New York prosecutor Damian Williams.
“We will have more information to give about the allegation” on Tuesday morning, he said in a tweet, with no further details on the nature of the allegations.
Sam Bankman-Fried has been in the media for a month, despite facing the risk of a fraud lawsuit after the spectacular implosion of the $32 billion-valued company earlier this year.
The United States has “filed a complaint” against the 30-year-old, who resides in the Bahamas, and “will likely seek his extradition,” Bahamian Attorney General Ryan Pinder said in a statement released on Twitter.
An investigation will be conducted in the Bahamas
Both countries “have an interest in holding accountable individuals associated with FTX who may have betrayed public trust and broken the law,” said Philip Davis, the premier of Cuba’s northeastern archipelago.
The Bahamas will conduct its own “criminal investigation into the collapse of FTX,” he added, quoted in the statement.
In the United States, “if he’s convicted of fraud, he could spend the rest of his life in prison, given the amount,” estimates Jacob Frenkel of the Dickinson Wright firm.
“There would be no indictment if prosecutors are not absolutely convinced that they will get a conviction,” added this federal investigations specialist, who worked for the US stock market policeman (SEC).
A lack of experience pointed out
Sam Bankman-Fried was scheduled to speak before a House of Representatives committee on Tuesday, as was John Ray, the new head of FTX.
The former executives of the bankrupt platform have exhibited “complete failure” at all levels of scrutiny, spending without really counting their clients’ money, John Ray said Monday, in a document released the day before the congressional hearing.
At first glance, “the collapse of the FTX group appears to be the result of the sheer concentration of control in the hands of a very small group of grossly inexperienced and unsophisticated individuals who have not implemented any of the systems or controls required for a company entrusted other people’s money or assets,” the official said.
Considered one of the leading cryptocurrency exchanges in the world, in early November FTX was suddenly unable to return the money it had deposited there to its customers. The group filed for bankruptcy on November 11.
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