Hailed as 'next Warren Buffet', Sam Bankman, whose crypto empire crashed, held

The arrest comes on the eve of Bankman-Fried's scheduled appearance at a US Congress hearing in which he was to testify under oath about the crypto exchange's overnight demise.

Updated on: Dec 13, 2022, 07:00:56 IST

By HT News Desk

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Embattled cryptocurrency mogul and former FTX CEO Sam Bankman-Fried was arrested in the Bahamas after being criminally charged by US prosecutors. US officials have been seeking to charge Bankman-Fried after the spectacular collapse of his FTX platform.

Samuel Bankman-Fried, founder and CEO of FTX. (AFP)

The arrest comes on the eve of Bankman-Fried's scheduled appearance at a US Congress hearing in which he was to testify under oath about the crypto exchange's overnight demise. (Also Read | Bankman-Fried's FTX, parents bought Bahamas property worth $121 mn: Report)

"Earlier this evening, Bahamian authorities arrested Samuel Bankman-Fried at the request of the US Government, based on a sealed indictment filed by the southern district of New York," US prosecutor Damian Williams said in a statement.

"We expect to move to unseal the indictment in the morning and will have more to say at that time," he added.

All you need to know about the FTX-Sam Bankman-Fried saga

Once among the world's largest cryptocurrency exchanges, FTX filed for bankruptcy protection on November 11 in one of the highest-profile crypto blowups.

The liquidity crunch came after Bankman-Fried secretly moved $10 billion of FTX customer funds to Alameda, Reuters reported, citing two people familiar with the matter.

FTX's valuation imploded following a November 2 report on ties between FTX and Alameda, a trading company also controlled by Bankman-Fried, which exposed that Alameda's balance sheet was heavily built on the FTT currency – a token created by FTX and with no independent value.

The price of FTT plunged in early November, roiling both Alameda and FTX.

Samuel Bankman-Fried had in recent weeks defied legal advice, offering his version of his company's sudden failure, usually by video link from the Bahamas where his company is headquartered.

(With inputs from AFP, Reuters)

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HT News Desk
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