Bahamas police swoop on founder of bankrupt crypto firm FTX

The creator of the insolvent cryptocurrency company FTX, Sam Bankman-Fried, has been detained by Bahamas police.

According to the attorney general of the nation, the Bahamas have received official information from the US that criminal charges have been brought against him there and that an extradition request is expected to follow.

When FTX, the second-largest cryptocurrency exchange in the world, sought bankruptcy protection in the US last month and Bankman-Fried resigned as CEO, it caused a public outcry calling for further regulation of the sector.

As traders hurried to remove $6 billion (£4.89 billion) from the distressed crypto trading platform in just 72 hours, it was difficult for the business to raise money to prevent its collapse.

His website was being used by more than a million users to purchase commodities like Bitcoin.

Bankman-Fried, also known as “SBF,” had emerged as one of the most well-known figures in the cryptocurrency sector as a result of his company’s intervention to prevent the bankruptcy of smaller businesses.

But in just three days, a string of shocking revelations caused FTX to spectacularly collapse and declare bankruptcy on its own.

A representative for the Manhattan, New York, office of the US Attorney confirmed that Bankman-Fried had been detained in the Bahamas but would not comment on the specific accusations.

Reuters reported that Bankman-Fried expresses his “great remorse” for caving to pressure and signing the bankruptcy file documents in a draught of his testimony.

Further, it states that “less than ten minutes after signing a paper designating [his replacement] John Ray as CEO, he received a prospective funding offer for billions of dollars,” according to Reuters.

FTX was created to make it possible for users to purchase cryptocurrency using their dollars and pounds. It received plaudits for having an intuitive user interface and generated revenue by adding a modest fee to each transaction.

In a series of interviews and outings in late November and early December, Bankman-Fried acknowledged mistakes in risk management but refuted fraud allegations.

SBF sprang to prominence as a unique character recognised for his wild hair, T-shirts and shorts. In addition to supermodel Gisele Bundchen, he participated in panels alongside famous statesmen including former British Prime Minister Tony Blair and US President Bill Clinton.

He became one of the biggest donors to Democratic political candidates when he gave $5.2 million (£4.23 million) to President Joe Biden’s 2020 campaign.

On Tuesday, he will have to show up at a magistrates court in the Bahamas.

FILE - The FTX Arena logo is seen where the Miami Heat basketball team plays Nov. 12, 2022, in Miami. The former CEO of the failed cryptocurrency exchange FTX said Wednesday, Nov. 30, that he did not ...knowingly" misuse customers' funds, and claimed he believes his millions of angry customers will eventually be made whole. (AP Photo/Marta Lavandier, File)

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