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Sam Bankman-Fried, the creator of the defunct cryptocurrency exchange FTX, has been detained in The Bahamas, according to the country’s attorney general. He is due to appear before a magistrates’ court in Nassau, the Caribbean country’s capital, on Tuesday.
Mr. Bankman-Fried, 30, was detained for “financial offenses” under US and Bahamas regulations, according to police. FTX declared bankruptcy in the United States last month, rendering many customers unable to withdraw their cash.
According to a court filing, FTX owes about $3.1 billion (£2.5 billion) to its 50 biggest debtors. Among the most severe charges leveled against Mr. Bankman-Fried is that he used billions of dollars in client monies to prop up Alameda, his investment trading firm.
It is unknown how much money people who have funds in the exchange would receive at the conclusion of the bankruptcy procedures, while several experts have cautioned that it may be a small percentage of what they placed.
Mr. Bankman-Fried admitted to the BBC earlier this month that mistakes were made at the company, but he attempted to disassociate himself from charges of illicit behavior.
“I didn’t knowingly commit fraud, I don’t think I committed fraud, I didn’t want any of this to happen. I was certainly not nearly as competent as I thought I was,”
he told the BBC.
He also refuted claims that he was aware that Alameda was utilizing FTX customer monies.
“No that’s not true,” Mr Bankman-Fried said, while going on to acknowledge that as chief executive he was ultimately responsible for any mishandling of funds. “That’s on me, one way or another,”
he said
Customers may use the FTX exchange to exchange traditional currency for cryptocurrencies such as Bitcoin. Cryptocurrencies are not traditional currencies; instead, they are held online and function more like investment vehicles or securities, with considerable volatility.
Because of their anonymity, they have been favored for illicit operations such as drug sales and ransomware assaults, but advocates argue that they offer enormous potential for innovation – and independence from governments.
Mr. Bankman-Fried was formerly seen as a younger counterpart of famed US investor Warren Buffett, and his net worth was estimated to be more than $15 billion as recently as late October.
Prior to FTX’s demise, he appeared to take pleasure in revealing to his Twitter followers his lifestyle, which included playing League of Legends while on phone conversations, even while seeking to attract investors, and sleeping on a beanbag next to his desk in the office.
He was well-known in Washington, DC as a political donor, primarily to Democratic politicians or organizations ostensibly advocating pandemic preparedness and greater crypto regulation.
Mr Bankman-Fried will be held in custody “pursuant of our nation’s Extradition Act,” the Attorney General of the Bahamas said in a statement.
