Disgraced crypto king arrested in Bahamas

The New York Times reports that Mr Bankman-Fried was arrested after authorities in the US filed criminal charges in relation to the sudden downfall of his $32 billion cryptocurrency platform FTX. The spectacular implosion of the 30-year-old’s company in November coincided with the disappearance of billions of dollars in customer funds.Mr Bankman-Fried told former employees in a letter last month that he was “deeply sorry” about the crypto exchange collapsing but continued to point the finger at the company’s bankruptcy filing, insisting that he could have saved the platform if given enough time.“I feel deeply sorry about what happened. I regret what happened to all of you,” Mr Bankman-Fried — who reportedly purchased hundreds of millions of dollars worth of pricey real estate in the Bahamas, even as he claimed to champion “effective altruism” — said in the letter.“I didn’t mean for any of this to happen, and I would give anything to be able to go back and do things over again. You were my family. I’ve lost that, and our old home is an empty warehouse of monitors. When I turn around, there’s no one left to talk to.”The letter was posted on FTX’s internal Slack channel by a staff member. FTX lawyers told a bankruptcy judge in Delaware in late November that “a substantial amount of assets have either been stolen or are missing”.FTX filed for protection in the US after traders pulled $US6 billion ($8.9 billion) from the platform in three days and rival exchange Binance abandoned a rescue deal. The collapse has left an estimated one million creditors facing losses totalling billions of dollars.During the bankruptcy hearing last week, a lawyer for FTX told the court that the company was allegedly run by Mr Bankman-Fried as his own “personal fiefdom”.It was reported over the weekend that Mr Bankman-Fried had agreed to testify before the House Financial Services Committee at a hearing about the crypto exchange’s overnight collapse.The testimony in the US capital would mark a throwback to the heady period before FTX’s sudden implosion, when the mop-haired computer whiz was feted in Washington as a respectable face for cryptocurrency who doled out tens of millions of dollars in political donations.“By speaking out, Mr. Bankman-Fried is putting himself in greater jeopardy and acting contrary to what competent counsel would advise a client,” said Jacob Frenkel, a former Justice Department prosecutor at Dickinson Wright.As much as anyone, Mr Bankman-Fried had embodied the apparent arrival of cryptocurrency as a major market in finance and no longer a frowned on get-rich-quick scheme shunned by the establishment.The Massachusetts Institute of Technology graduate, the son of two Stanford Law School professors, fit the tech wunderkind profile as he posed for magazine spreads and pushed Super Bowl television spots and other splashy marketing campaigns to draw in investors.But after reaching a valuation of $32 billion, FTX’s implosion was swift following a November 2 report on the cryptocurrency news site CoinDesk on ties between FTX and Alameda, a trading company also controlled by Mr Bankman-Fried.The report exposed that Alameda’s balance sheet was heavily built on the FTT currency — a token created by FTX and with no independent value.The price of FTT plunged in early November, roiling both Alameda and FTX, where Alameda had large trading positions.Reeling from customer withdrawals and short some $8 billion, FTX and some 100 related entities filed for bankruptcy protection on November 11, inviting scrutiny from regulators, prosecutors and furious clients who had believed the hype about cryptocurrency.— with AFP Via news.com.au — Australia’s leading news site https://www.news.com.au