One of the most unexpected news of 2022 was the fall of FTX exchange on November 11. The news came months after LUNA crash which further eroded the market cap of the crypto industry. From standing tall at over $2 trillion in 2021, the market collapsed & now stands at $870 billion.
FTX collapse caused a Domino effect on the projects tied to its hedge fund Alameda Research. In the following days, the market witnessed the fall of crypto giants like Genesis, BlockFi and several others.
During the chapter 11 bankruptcy filing, it was revealed that FTX has transferred over a billion dollars of user funds to Alameda Research which is either consumed or lost in the balance sheet. The total value of missing funds now stands at $10 billion and all fingers are pointed at the founder & ex-CEO of the company Sam Bankman Fried. Sam has been avoiding arrest ever since the company filed for bankruptcy while staying in his office in the Bahamas.
In the latest update, Sam has been arrested by the Royal Bahamas Police at the behest of US government. The Police followed a formal notice issued by US government that stated the charges filed against Sam.
According to reports by The New York Times, the charges against him include security fraud, financial misconduct, money laundering & conspiracy to commit wire & security fraud. It is quite clear that US will request the extraction of Bankman-Fried from the Bahamas.
Meanwhile, the US Department of Justice (DOJ) is closely scrutinizing the charges filed against FTX which include transferring millions of dollars around at the time of filing for bankruptcy.
The news came as a surprise since many were expecting him to virtually appear & testify before the House Committee on Financial Services in a hearing investigation against the crypto exchange and its related entities.
The crypto stalwarts & the users expressed their response on Twitter by embracing this decision. The arrest was long awaited especially for FTX users whose funds are stuck on the exchange after freezing withdrawals before filing for bankruptcy.
As per the lawyers, the case is so much entangled that it will take years for users to get back their funds. All eyes are on the judicial system now.
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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.
