On Dec12, The Royal Police of Bahamas arrested Sam Bankman-Fried on multiple charges. The order of arrest was issued by the US government taken under the supervision of the Bahamas authority.
Things aren’t going in favour of the ex-CEO & founder of FTX after he filed for bankruptcy in November, unearthing a series of frauds and financial misconduct taking place within the organization.
To add insult to injury, on Dec13 a Bahamian judge denied bail on the grounds of high risk of him eloping from the country. It is said that he will be extradited to the US and will be tried by the US court of law under US Department of Justice (DOJ).
Sam was once accredited as one of the youngest billionaires who amassed over $20 billion of fortune which collapsed after FTX filed for bankruptcy.
The US prosecutors said that Bankman-Fried was engaged in a scheme to defraud FTX’s customers by using their deposits to pay for expenses & debts and to make investments on behalf of its hedge fund company Alameda Research.
Sam allegedly tweaked the code of FTX exchange that allowed it to sell off Alameda Research’s Assets after it was losing too much of borrowed money. This allowed Alameda to keep on borrowing funds from FTX without any check which made the FTX reserve an empty vessel.
Before filing for bankruptcy, Bankman-Fried approached Binance CEO & founder ChangPeng Zhao (CZ) for a complete buyout. However, CZ refused to go ahead with the deal after looking at the FTX balance sheet.
Acc. to reports, Ripple CEO Brad Garlinghouse & Tron founder Justin Sun are interested in buying some of the FTX assets. The deal may take more time until the investigation come to fruition.
Now, all eyes are on the hearing of the case between FTX founder Sam Bankman-Fried and the US prosecutors. Will the users get their money back from the exchange? That’s a million-dollar question to ask. However, things will surely be going to take time to settle.
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Paras is a blockchain writer & video creator at Katoch Tubes. In his free time, he loves watching space exploration documentaries & Hollywood movies.