Bahamas arrest Sam Bankman-Fried a day before congressional appearance

Samuel Bankman-Fried

Federal authorities filed criminal charges against Sam Bankman-Fried, and The Bahamas intends to extradite him once U.S. officials request it.

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.

The founder of the FTX crypto currency exchange was slated to testify Tuesday, before the House Financial Services committee Tuesday.

“Bahamian authorities arrested Samuel Bankman-Fried at the request of the U.S. Government,” U.S. Attorney Damian Williams said, based on a sealed indictment filed in the 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.”

Bankman-Fried has been giving numerous interviews to reporters and making statements on social media trying explain why his company could not meet customers’ withdrawal requests.

Overnight, FTX went from being one of the biggest crypto currency exchanges to filing for bankruptcy and owing top creditors $3 billion.

Bankman-Fried made $38,421,700 in federal campaign contributions, according to the FEC, while another top FTX executive, Ryan Salame, doled out $23,986,800.

Bankman-Fried primarily gave money to Democrats while Salame donated mainly to Republicans. Other individuals associated with the company gave candidates a total of $8,262,750, according to FEC records.

Investigators want to know whether FTX used customer funds to finance Bankman-Fried’s investment firm, Alameda Research, but the 30-year-old 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.”

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