Crypto Company FTX Founder Sam Bankman-Fried Arrested: What We Know

FTX filed for bankruptcy on 11 November after traders withdrew $6 billion in three days.

Sam Bankman-Fried. 

(Photo: Altered by The Quint)

Sam Bankman-Fried, the founder of cryptocurrency company FTX, was arrested by Bahamian authorities on Monday, 12 December. Here is all we know.

Who is Sam Bankman-Fried? He is an American entrepreneur and investor who was the founder and CEO of FTX, a cryptocurrency exchange company. His net worth went as high as $26 billion. A month ago, however, his net worth was estimated at $10.5 billion.

What is FTX? It is a cryptocurrency exchange company, now defunct, that was founded in 2019, and during its peak had the third-largest crypto exchange with over one million users. The company had filed for bankruptcy on 11 November after traders withdrew $6 billion in three days.

Why did FTX land in trouble? Before FTX, Bankman-Fried co-founded Alameda Research, a crypto trading firm. But Alameda's piggybank held billions of dollars worth of FTX's own cryptocurrency, FTT, and the former had been using it as collateral in further loans. Due to shared ownership, a fall in the value of FTT could damage both companies, and investors started pulling out rapidly.

What are the investigative authorities saying? A statement from The Bahamas Police stated that Bankman-Fried had been arrested in reference to "various financial offences against laws of the United States, which are also offences against laws of the Commonwealth of The Bahamas."

What is Bankman-Fried saying? The accusation against Bankman-Fried is that he secretly moved $10 billion of FTX customer funds to Alameda Research. He, however, has maintained his innocence, claiming that he "didn't ever try to commit fraud" and the "fraud" was a product of "confusing internal labeling."