Yahoo Finance Sam Bankman-Fried: Crypto prices up as FTX founder charged with defrauding investors
The cryptocurrency market went green after the news that FTX founder Sam Bankman-Fried has been arrested by police in Bahamas.
On Monday evening the attorney general of the Bahamas announced Bankman-Fried's arrest for "financial offences" against laws in the US and The Bahamas.
Bankman-Fried is currently the only person charged in the indictment and was taken into custody by the Bahamian authorities shortly after 6pm at his apartment complex in the Albany resort in the Bahamas, according to a statement from the Bahamian police.
He has been charged by the Securities and Exchange Commission (SEC) with defrauding investors out of $1.8bn (£1.5bn).
Read more: FTX crash wipes billions from market as Binance steps in to buy crypto rival
The fallen cryptocurrency tycoon had become one of the biggest names in the industry before the sudden collapse of the FTX exchange at the beginning of November.
Thousands of users of the FTX cryptocurrency exchange are now unable to withdraw their funds and according to a court filing last month, the once prominent exchange owes its 50 largest creditors almost $3.1bn (£2.5bn).
The attorney general of the Bahamas announced in a statement that Bankman-Fried will be held in custody "pursuant of our nation's Extradition Act".
A Statement from the Royal Bahamas Police Force on the arrest of Samual Benjamin Bankman-Fried.
Police wish to inform that 30-year-old SAMUEL BENJAMIN BANKMAN-FRIED of California, U.S.A, has been arrested. pic.twitter.com/Mr85S2fzcN— Latrae L. Rahming (DOC)🇧🇸 (@latraelrahming) December 13, 2022
This was followed up by a tweet from the US Attorney's office in Manhattan which said: "Earlier this evening, Bahamian authorities arrested Samuel Bankman-Fried at the request of the US Government, based on a sealed indictment filed by the SDNY [Southern District of New York]. We expect to move to unseal the indictment in the morning and will have more to say at that time,"
US financial regulators also said that they would be taking action against Bankman-Fried, with US Securities and Exchange Commission (SEC) official Gurbir Grewal making a statement that said: "We commend our law enforcement partners for working to secure the arrest of Mr Sam Bankman-Fried in the Bahamas on federal criminal charges.
Read more: FTX founder: 'I hope I haven't killed crypto'
"The Securities and Exchange Commission has separately authorised charges relating to Mr. Bankman-Fried's violations of our securities laws, which will be filed publicly tomorrow in the Southern District of New York."
According to the Guardian, it remains uncertain as to when Bankman-Fried will be extradited to the US.
The United States has an extradition treaty with the Bahamas that will allow the US to seek extradition but there are likely a few legal hurdles to overcome before that happens.
Bankman-Fried was also due to speak before the US House of Representatives financial services committee on Tuesday in an online video call from the Bahamas.
In a statement, Congresswoman Maxine Waters who chairs the committee said she was disappointed Bankman-Fried would no longer be appearing at the hearing.
She said: “Although Mr Bankman-Fried must be held accountable, the American public deserves to hear directly from Mr Bankman-Fried about the actions that’ve harmed over one million people, and wiped out the hard-earned life savings of so many.
“The public has been waiting eagerly to get these answers under oath before Congress, and the timing of this arrest denies the public this opportunity.”
The New York Times reported it could take weeks or longer if Bankman-Fried decides to contest the extradition. however, Bankman-Fried has so far cooperated with authorities.
According to the Guardian, the FTX founder and his partners, Zixiao “Gary” Wang, Nishad Singh, and the CEO of Alameda Research Caroline Ellison, allegedly had formed a chat group on the encrypted platform Signal under the name “Wirefraud”.
This "Wirefraud" chat-group was also described Australian Financial Review which reported that it was used to send end-to-end encrypted information about FTX and its crypto hedge fund, Alameda Research, in the run-up to the implosion of the exchange.
The entire cryptocurrency made early gains on Tuesday, according to coingecko data the market capitalisation of the industry rose 0.4% in the past 24 hours to $879bn.
Check: Crypto live prices
Bitcoin increased in value to $17,170 on Tuesday, up 1.4% in the past 24 hours. Ethereum (ETH-USD) followed suite and rose 1.7% in the past day to $1,265.
Other altcoins saw unimpressive gains, with Cardano (ADA-USD) increasing by 0.3% in the past hour to $0.30, and dogecoin (DOGE-USD) up 0.4% in the past 24 hours to $0.088.
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