Sam Bankman-Fried, the founder of the collapsed cryptocurrency exchange FTX, was arrested Monday in the Bahamas after U.S. prosecutors filed an indictment against him.
FTX and Bankman-Fried have been under investigation by U.S. law enforcement agencies after his company imploded in November, losing billions of dollars of its customers’ money. He was slated to testify in front of the House Financial Services committee Tuesday.
Spokespeople for Bankman-Fried, the prime minister of the Bahamas, the attorney general of the Bahamas and the House Financial Services Committee did not immediately respond to requests for comment.
Bankman-Fried has spent the past few weeks in his Bahamas estate, giving numerous interviews to reporters and making dozens of social media posts trying explain how his company went from being one of the biggest and most-respected crypto exchanges to filing for bankruptcy after it could not meet its customers’ withdrawal requests. The company owes its top creditors $3 billion, according to bankruptcy filings, and investigators have sought answers on whether it used customer funds to lend money to Bankman-Fried’s investment arm, Alameda Research.
Bankman-Fried has said he made grave mistakes but has denied any malicious wrongdoing.
The chief executive brought in to handle the restructuring, John J. Ray, has described a chaotic environment at FTX with “a complete absence of trustworthy financial information.” In prepared remarks for the congressional testimony, Ray said his initial investigation of the company showed “gross mismanagement, excessive leverage” and “failures of internal controls.”
