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Former FTX CEO Sam Bankman-Fried was arrested in the Bahamas following the US investigation into the FTX collapse and fraudulent defrauding of clients of the company. His extradition to the US is expected in the next few hours.
The charges against SBF will be officially announced in the next few hours, and will be of fraud and money laundering. "The Bahamas and the United States share an interest in holding accountable all those associated with FTX who may have betrayed public trust and broken the law," said Caribbean Prime Minister Philip Davis.
Former FTX CEO had created a platform for digital transactions in 2019 that has become one of the most important in the world, but the revelations of a financial site CoinDesk have highlighted the overdrawn accounts, the hole in the company's balance sheet and financial scams against of his customers.
At least eight billion dollars would be missing, a series of bankruptcy investments that SBF had carried out without the users' knowledge. Bankman-Fried himself said: "I'm sorry, I made a big mistake." SBF moved FTX's headquarters to Nassau, capital of the Bahamas, from Hong Kong in 2021.
In the final weeks after Chapter 11, he launched the media offensive with a series of virtual interviews to explain its truth, and to publicly mea culpa for the mistakes that drove FTX into bankruptcy causing huge losses to investors.
Sam Bankman-Fried arrested in the Bahamas
Bankman-Fried has filed for bankruptcy proceedings that freeze pending a full investigation into the company's accounts. Bankman-Fried was expected today by the House committee to testify about the financial collapse of his platform.
Congress expects to understand how the collapse was possible and what consequences it could have for users. FTX named restructuring expert John Ray as CEO following Bankman-Fried's Nov. 11 resignation, shortly before filing for bankruptcy.
Ray oversaw the liquidation of Enron, the energy trading giant that collapsed in scandal and bankruptcy in 2001. Financial analysts have compared the bankruptcy of FTX to that of the Lehman Brothers bank in 2008, which swept through Wall Street and threw millions of savers out of business.