Sam Bankman-Fried, Founder of Cryptocurrency Exchange FTX Arrested in Bahamas

Sam Bankman Fried Founder of Cryptocurrency Exchange FTX Arrested in Bahamas
Sam Bankman Fried Founder of Cryptocurrency Exchange FTX Arrested in Bahamas
Khushbu Kumari

The United States Securities and Exchange Commission accuses Sam Bankman-Fried of 'orchestrating a scheme to defraud investors' in the failed cryptocurrency exchange FTX.

“Orchestrate a scheme to defraud investors.”

That is the accusation facing Sam Bankman-Fried, the founder of FTX, the international cryptocurrency market that recently collapsed, putting thousands of investors in a precarious situation.

The charges were announced on Tuesday by the US Securities and Exchange Commission (SEC), after the announcement of his arrest in the Bahamas on Monday.

Bankman-Fried built a “house of cards based on deception,” said SEC Chairman Gary Gensler.

He added that the alleged fraud was a call for other platforms to comply with US law.

Earlier, a spokesman for the US attorney's office in Manhattan confirmed that Bankman-Fried had been arrested.

“As a result of the notification received and the material that was included, it was deemed appropriate for the attorney general to seek the arrest of SBF, and to hold him in custody, in accordance with our country's extradition act,” the attorney general said. from the Bahamas Ryan Pindery, according to the Reuters news agency.

Last month, FTX filed for bankruptcy in the US, leaving thousands of clients unable to withdraw their investments from the market.

It was the second largest cryptocurrency exchange in the world, trading about $10 billion a day.

The “king” fallen from grace

In his prime, Bankman-Fried was seen as a younger version of legendary American investor Warren Buffet.

As of the end of October, he had an estimated net worth of more than $15 billion.

However, by his own account, he underestimated the large amount of cash needed to cover FTX client withdrawals, causing panic among clients.

A lot of crypto companies, the firms that deal with cryptocurrencies, have struggled with the contraction of the economy in general and concerns about the viability of cryptocurrencies in general.

Bankman-Fried resigned as CEO of FTX on November 11.

According to court documents filed earlier this month, FTX currently owes its 50 largest creditors almost $3.1 billion.

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