Former FTX CEO Bankman-Fried arrested in Bahamas

Bankman-Fried was once known as the Jewish king of crypto

 Sam Bankman-Fried testifies during a hearing before the House Financial Services Committee on Capitol Hill in Washington, D.C., Dec. 8, 2021. (photo credit: Alex Wong/Getty Images)
Sam Bankman-Fried testifies during a hearing before the House Financial Services Committee on Capitol Hill in Washington, D.C., Dec. 8, 2021.
(photo credit: Alex Wong/Getty Images)

The Bahamas police have arrested former FTX CEO Sam Bankman-Fried, the country's attorney general said on Monday, adding that The Bahamas has received formal notification from the United States of criminal charges against him.

A spokesman for the US Attorney's office in Manhattan confirmed Bankman-Fried had been arrested in The Bahamas but declined to comment on what the charges were.

 Representations of cryptocurrencies are seen in front of displayed FTX logo and decreasing stock graph (credit: REUTERS) Representations of cryptocurrencies are seen in front of displayed FTX logo and decreasing stock graph (credit: REUTERS)

"As a result of the notification received and the material provided therewith, it was deemed appropriate for the Attorney General to seek SBF's arrest and hold him in custody pursuant to our nation’s Extradition Act," the office of The Bahamas Attorney General Ryan Pinder said.

A lawyer for Bankman-Fried could not immediately be reached for comment.

In a series of interviews and public appearances in late November and December, Bankman-Fried acknowledged risk management failures but sought to distance himself from accusations of fraud, saying he never knowingly commingled customer funds on FTX with funds at his proprietary trading firm, Alameda Research.

"I didn't ever try to commit fraud," Bankman-Fried said in a Nov. 30 interview at the New York Times' Dealbook Summit, adding he doesn't personally think he has any criminal liability.

FTX, which had been among the world's largest cryptocurrency exchanges, filed for bankruptcy protection on Nov. 11 in one of the highest-profile crypto blowups after traders pulled $6 billion from the platform in three days and rival exchange Binance abandoned a rescue deal.

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. At least $1 billion in customer funds had vanished, the people said.

Bankman-Fried resigned as FTX's chief executive officer the same day as the bankruptcy filing.

Sam Bankman-Fried: The rise and fall of the Jewish king of crypto

Bankman-Fried was once known as the king of crypto, with his FTX cryptocurrency exchange making him a billionaire and putting him on top of the market.

 And seemingly overnight, it all came crashing down – along with his net worth.

 But who is the 30-year-old cryptocurrency wunderkind? 

Bankman-Fried hails from an upper-middle-class family of Jewish academics and grew up steeped in higher education.

 Starting out his career at Jane Street, SBF opened up the Alameda Research trading firm and soon got into the cryptocurrency game.

 By late 2018, Bankman-Fried opened up the FTX cryptocurrency exchange. 

 Based in the Bahamas, FTX achieved renown as one of the most stable and reliable players in the crypto field.

 In his position, SBF made use of his assets for what he described as Effective Altruism, bailing out ailing digital asset firms and donating his money, including to many causes aligned with the Democratic Party. 

At his peak, SBF's crypto investments and business activities proved to be incredibly profitable. Estimates had placed SBF's net worth at $26 billion at his peak, though he averaged around $10-$16 billion in October.

 Despite this, SBF famously eschewed most material pleasures associated with the super-rich, having little in the way of physical material assets like fancy cars, clothes or jewelry.

 But everything changed come November when FTX came crashing down.

 This happened on November 8 when Binance, the world's largest cryptocurrency exchange, announced it would try to purchase FTX, which had undergone a liquidity crisis after the firm sold its holdings in the FTX token FTT, completely tanking the token's worth. By November 9, Binance pulled out.

 By the end of it all, SBF lost his billionaire status.