By George Ward
With so much generated news after the crash of his crypto exchange FTX and his hedge fund firm, Alameda Research, Sam Bankman-Fried is the most talk-about individual in the crypto industry. With authorities seeking answers to what led to the unfortunate event, the former FTX boss was arrested in the Bahamas on the order of the United States government.
Two Countries, Different Investigation
According to a statement from the United States Attorney for the Southern District of New York, the Bahamian authorities acted on the request of the US government to arrest the embattled former FTX CEO on December 13.
Interestingly, the arrest came just a day before Bankman-Fried is scheduled to appear before the US Congress to testify about his role in the collapse of the crypto exchange. Meanwhile, the ex-FTX owner is alleged to have committed wire and securities fraud and conspiracy to commit money laundering, among other charges.
As expected, his arrest in the Bahamas created some noise within the crypto community. Meanwhile, the official statement from the Royal Bahamas Police Force was that Bankman-Fried’s offenses in the US are also illegal in the country.
According to the Prime Minister of the Bahamas, Philip Davis, both countries have a mutual interest in ensuring that individuals involved in the FTX fiasco will account for their actions, as they have broken the law and betrayed the public’s trust.
Per a Bloomberg report on December 10, a federal investigation will look into Bankman-Fried’s role in the movement of FTX funds out of the United States. In addition, the Department of Justice (DoJ) officials have discussed with FTX’s lawyers the information they require for a further probe.
The DoJ also intends to investigate whether Bankman-Fried transferred FTX’s funds to Alameda Research. The Bahamian government is also investigating the activities of Bankman-Fried and his associates.
Thus, the country’s civil and criminal agencies are also part of the government’s investigation team to determine the operation mode of the now-collapsed FTX. Other Bahamian agencies taking part in the investigation include the Financial Intelligence Unit, the Securities Commission, and the Financial Crimes Unit of the Bahamas.
The arrest of the former FTX CEO and his possible extradition to the United States suggest that the two countries have collaborated since the bankruptcy proceedings began.
How Are The Mighty Fallen
Last month, FTX and its sister agency, Alameda Research, filed for bankruptcy in the United States, with Bankman-Fried stepping down from his position as CEO. The collapse of FTX was accelerated after reports emerged showing a high concentration of the platform’s native token, FTT, was used by Alameda Research to collateralize billions of crypto loans.
As a result, Binance, a rival exchange, announced that it was selling its FTT stakes, which sparked massive asset withdrawals from FTX.
Due to the massive withdrawal requests, the firm froze all assets and filed for bankruptcy days later. Since then, there have been several discoveries about the embattled crypto exchange, and Bankman-Fried’s arrest will likely provide more.