Sam Bankman-Fried, founder of FTX, is arrested in the Bahamas

According to the Bahamas attorney general, Sam Bankman-Fried, former chief executive of FTX, was arrested.

The US Attorney’s Office in Manhattan confirmed the arrest. This marks a shocking fall from grace for the 30-year-old entrepreneur. He rode a boom of bitcoin and other digital assets to become a millionaire many times before FTX’s rapid decline.

The exchange was launched in 2019 and is based in the Bahamas. It filed for bankruptcy on Nov 11, after it failed to raise enough money to prevent collapse. Traders rushed to withdraw $6bn (£4.8bn), from the platform in just three days.

A Delaware court heard that 8% of FTX’s users were based overseas. This suggests that 80,000 Britons could have lost their money. FTX left approximately one million creditors. The vast majority were unsecured users of the exchange.

The FTX’s chief executive, Mr Bankman-Fried was widely known by his initials SBF. He resigned the following day.

As Mr Bankman-Fried was preparing to lash out against his former lawyers at Sullivan and Cromwell and new FTX chief executive John Ray and rival Exchange operator Binance at a Congressional Hearing on Tuesday, the arrest occurred.

In a series of interviews and public appearances, Mr Bankman Fried acknowledged his risk management shortcomings but tried to distance himself from any accusations of fraud.

He stated that he had never used customer funds for FTX at Alameda Research, his proprietary trading firm.

“I never tried to commit fraud,” Mr Bankman Fried said in a November 30, interview at The New York Times’ Dealbook Summit. He also stated that he doesn’t believe he is liable for any criminal offences.

According to Reuters, the liquidity crunch that caused FTX’s collapse was caused by Mr Bankman-Fried secretly moving $10bn (PS8.1bn), of FTX customer funds from FTX to Alameda.

A spokesperson for the US Attorney’s Office confirmed that Mr Bankman-Fried was arrested in the Bahamas, but declined to comment further.

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