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Topics: News, Cryptocurrency
Stewart Perrie
Topics: News, Cryptocurrency
FTX founder Sam Bankman-Fried has been arrested in The Bahamas.
The former cryptocurrency billionaire has been accused of 'betraying the public trust' after the digital coin exchange collapsed.
FTX failed in the cryptocurrency version of a bank run, which is when customers tried to withdraw their assets all at once because of growing doubts about the financial strength of the company.
Since its collapse, FTX's new management has called the cryptocurrency exchange's management a 'complete failure of corporate controls'.
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CNBC says Bankman-Fried could soon be extradited to the United States to face 'unspecified criminal charges'.
The Bahamas Attorney General, Ryan Pinder, said: "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.
"At such time as a formal request for extradition is made, The Bahamas intends to process it promptly, pursuant to Bahamian law and its treaty obligations with the United States."
The Bahamian Prime Minister Philip Davis added in a statement following Bankman-Fried's arrest: “The Bahamas and the United States have a shared interest in holding accountable all individuals associated with FTX who may have betrayed the public trust and broken the law.
"While the United States is pursuing criminal charges against SBF individually, The Bahamas will continue its own regulatory and criminal investigations into the collapse of FTX, with the continued cooperation of its law enforcement and regulatory partners in the United States and elsewhere.”
Bankman-Fried was once one of the richest people in the world on paper, but now he's claimed he only has a comparatively measly $100,000 (£82,440) to his name.
The 30-year-old has said he takes responsibility for FTX's collapse and explained that he failed to grasp the amount of risk FTX and his other company Alameda Research were taking on across both businesses.
Speaking at the New York Times' DealBook summit via a video-link from The Bahamas last month, he said he now has 'close to nothing' and admitted that his businesses 'completely failed' with regard to risk management, which was 'pretty embarrassing in retrospect'.
"Whatever happened, why it happened, I had a duty to our stakeholders, our customers, our investors, the regulators of the world, to do right by them," he said.
Bankman-Fried has been accused of allowing Alameda to use customers' assets in FTX to place bets in the market.
Exchanges like FTX are supposed to segregate customers' deposits.
Other financial companies have landed themselves in hot water for misusing customers' deposits - one example being MF Global roughly 10 years ago.
Bankman-Fried insisted that he did not 'knowingly' co-mingle customers assets with Alameda and said he believed that millions of angry customers would eventually be reunited with their funds.