Sam Bankman Fried, the former CEO of FTX involved in one of the major exchange bankruptcies over the past few months, was arrested in the Bahamas on Monday at the request of the US government. Criminal charges have been filed against Sam in the US. Authorities in the US and the Bahamas launched investigations against Sam after the exchange went bankrupt last month.
Second largest international crypto exchange ftx had filed for bankruptcy early last month after running short of funds. Bahamas Attorney General Ryan Pinder said that Sam would be extradited after receiving information about the charges against him and making a formal request to the US authorities. FTX is headquartered in the Bahamas and since its bankruptcy, Sam has made the Bahamas his base. His spokesperson did not comment on this. They have the right to oppose their extradition. This may delay extradition.
Sam’s arrest comes a day before his scheduled appearance before the Financial Services Committee in the US. Sam, one of America’s richest men, has an estimated net worth of more than $30 billion. Troubles for the exchange started last month when its balance sheet was questioned. After this the customers of the exchange tried to withdraw billions of dollars from it but most of them could not get their money.
FTX founder Sam secretly transferred about $10 billion of customers’ funds to his trading firm, Alameda Research. A large part of this fund has gone missing. The missing funds range from approximately $1.7 billion to $2 billion. This disturbance was discovered when Sam showed the records to other senior executives. After this, Binance, which was involved in major crypto exchanges, took the initiative to buy it but later backed out. There was a big drop in the crypto market, including bitcoin, the largest cryptocurrency by market capitalization, following the report of FTX going bankrupt. The problems for FTX started with a huge loss to Alameda Research.