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FTX founder Sam Bankman-Fried arrested in the Bahamas


(NewsNation) — Sam Bankman-Fried, the founder and former CEO of cryptocurrency exchange FTX, has been arrested in the Bahamas, authorities said.

Bankman-Fried was taken into custody Monday after the United States notified Bahamian police it had filed criminal charges against Bankman-Fried and is likely to request an extradition, the Bahamas attorney general’s office announced in a news release.

Short billions of dollars, FTX filed for bankruptcy and Bankman-Fried resigned after experiencing the crypto equivalent of a bank run. The Securities and Exchange Commission and the U.S. Justice Department are investigating whether FTX used customers’ deposits to fund investments at Alameda Research, possibly mixing client funds with company assets, which is regulated against in most securities markets.

Criminal charges were filed under seal by the U.S. Attorney’s Office for the Southern District of New York, the office said in a tweet. The indictment is expected to be unsealed Tuesday morning.

“I didn’t ever try to commit fraud,” Bankman-Fried said in an interview with the New York Times last month, adding that he doesn’t personally think he has any criminal liability.

The liquidity crunch at FTX came after Bankman-Fried secretly moved $10 billion of FTX customer funds to Alameda Research, Reuters reported, citing two people familiar with the matter. At least $1 billion in customer funds had vanished, the people said.

Bankman-Fried told Reuters the company did not “secretly transfer” but rather misread its “confusing internal labeling.

In a statement, Bahamas Prime Minister Philip Davis said his country and the U.S. have a “shared interest in holding accountable all individuals associated with FTX who may have betrayed the public trust and broken the law.”

Reuters contributed to this report.