- The FTX cryptocurrency exchange founder Sam Bankman-Fried (SBF) was arrested Monday in the Bahamas but will not be returned to the U.S. until he agrees to extradition, or is forced to return after a February 8 hearing.
- The U.S. Securities and Exchange Commission (SEC) says Bankman-Fried defrauded investors in a “years-long scheme” of billions of dollars.
- The SEC says Bankman-Fried also concealed risks in the cryptocurrency exchange and concealed FTX’s relationship and financial transactions with his trading firm Alameda Research, of which Bankman-Fried was a majority owner.
- The judge in the Bahamas denied bail, so SBF will remain in a squalid, maximum-security facility in the Bahamas.
WHY IT’S NEWS
SBF is under investigation for the role he played in FTX’s collapse—though until now he has not been charged with any crimes. He has denied any attempts to commit fraud, but he admits that he made several errors as manager of FTX.
After the company’s bankruptcy and ensuing chaos that came from its collapse, the Financial Services Committee announced that it would be investigating the cause of such a massive market disruption and its disastrous effect on the cryptocurrency market.
The crypto trading company’s bankruptcy in early November left nearly 1 million customers and investors facing potentially billions of dollars in losses. Digital assets such as bitcoin dropped after the announcement.
When the committee announced its hearing, it stated that it planned to hear from SBF, Alameda Research, Binance, FTX, and others. However, SBF did not respond to the committee’s request by the deadline.
After his tweet that seemingly confirmed his appearance, Bankman-Fried’s spokesman says that nothing had been finalized and “details are still being worked out.”