After Bankman-Fried Arrest: Charges Against FTX Founders

Status: 12/13/2022 9:26 p.m

The founder of the insolvent crypto exchange FTX was arrested in the Bahamas on Monday. Now, among others, the US Securities and Exchange Commission has filed a lawsuit against Bankman-Fried. He is said to have embezzled funds from investors.

By Claudia Sarre, ARD Studio Washington

Just a few months ago he was considered a child prodigy in the crypto industry, now Sam Bankman-Fried faces many years in prison. Shortly before his arrest in the Bahamas last night, the founder of insolvent crypto exchange FTX gave an interview. In it, the 30-year-old said he did not expect to face a prison sentence if he was extradited to the United States.

But then everything turned out differently. SBF, as Bankman-Fried is known in the crypto scene, was arrested. Then not only the US Securities and Exchange Commission and the CFTC brought charges against him, but also the New York prosecutor’s office. The accusation: The former FTX boss is said to have misled investors with false promises and embezzled a total of more than $1.8 billion.

Billions gone

His company FTX – one of the largest platforms for cryptocurrencies – went spectacularly bankrupt a few weeks ago. He himself is suspected of illegally transferring billions into the Alameda hedge fund, which he founded, in order to compensate for losses from high-risk transactions. When FTX was suddenly unable to pay out customer funds, Bankman-Fried resigned on November 11 and filed for bankruptcy in the US state of Delaware.

In an interview with the business magazine Forbes in the days before his arrest, Bankman-Fried showed remorse, but he did not admit his guilt: “I’m concerned about the people who were hurt here. And about how I can at least help And I’ve been thinking about what that now means for the crypto ecosystem and what I, what we as a company, should have done differently.”

Bankruptcy trustee sees “complete failure”

Sam Bankman-Fried was supposed to testify under oath before the US Congress today. Instead, the new CEO John Ray, who took over the management of FTX in the bankruptcy proceedings, said. He spoke of a complete failure: “The collapse of FTX appears to be due to the absolute concentration of control in the hands of a small group of very inexperienced, naive people.”

According to experts, the fact that the US judicial authorities reacted so quickly and had the ex-billionaire arrested immediately is an indication that the prosecutors are very sure of their case. Extradition of Bankman-Fried to the United States should only be a formality.

After arrest of FTX boss: US Securities and Exchange Commission files charges

Claudia Sarre, ARD Washington, 12/13/2022 8:43 p.m

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