Founder of crypto exchange FTX (29) arrested in Bahamas for massive fraud

According to the SEC’s complaint, Bankman-Fried raised more than $1.8 billion through a “planned scheme to defraud investors.” He used the money for risky investments, buying estates and making large political donations. SEC talks of ‘multiple years of fraud’ with a homebuilder card.

A year ago, Flag exited the then two-year-old crypto trading platform FTX.

Investors in line

Young crypto billionaire Bankman-Fried’s (29) company raised an additional $420 million in capital and was valued at $25 billion.

Investors lined up to lend to the company. Via FTX you can trade in well-known cryptos like Bitcoin and Ethereum.

However, the platform offers derivative investment products such as derivatives, options and crypto ETFs (Exchange Traded Funds) through which you can indirectly invest in crypto currencies through the underlying index.

Last month, however, the crypto exchange collapsed when an acquisition fell through. This was followed by the digital banking movement. Failure to find new investors saw billions worth of value evaporate and FTX collapsed. The fallen CEO used his clients’ money for risky investments in his other company, called Alameda. Then the billions disappeared. He also misappropriated part of that money for private expenses like real estate.

‘No intention’

Bankmann-Fried has always maintained that there was no intention involved. His company is on the rocks because of troubled finances, he said. But now he has been charged and arrested in the Bahamas, where he lives and where his company is headquartered.

Prosecutors announced in New York City Court that Bankman-Fried was charged with a total of eight felonies. FTX for Alameda used customer funds improperly and misled lenders and customers about the financial health of its crypto companies. He also laundered the income.

FTX’s current CEO, John Ray III, has plenty to criticize about his predecessor. He said that the collapse of the crypto exchange was the result of the concentration of almost all responsibility in a small group of very inexperienced executives. Additionally, there is virtually no dividing line between FTX and Alameda.