Authorities in Bahamas arrest disgraced FTX founder Samuel Bankman-Fried

By Michael Hernandez

WASHINGTON (AA) - Authorities in the Bahamas arrested Samuel Bankman-Fried, the founder of a now defunct cryptocurrency exchange, on Monday at the request of the US government.

US Attorney for the Southern District of New York Damian Williams said the FTX founder was arrested Monday evening based on a sealed indictment filed by his office. US authorities expect to unseal the indictment Tuesday morning, and more will be said at that time.

Bankman-Fried’s arrest comes one day before he was to testify before the House Financial Services Committee about the spectacular multi-billion dollar implosion of his company that sent shockwaves through crypto markets.

The sudden collapse of FTX, once the world's third-largest cryptocurrency exchange by daily trading volume, left its users and investors in the dark and caused a rapid meltdown in the cryptocurrency market last month.

The Justice Department asked an independent examiner on Dec. 1 to review FTX's bankruptcy protection case to determine the events and the company's structure that led to the company's collapse.

"Over the course of eight days in November, beginning with reports of significant problems with one debtor’s (Alameda Research) balance sheet, the Debtors suffered a virtually unprecedented decline in value – from a market high of $32 billion just earlier this year – and a severe liquidity crisis after a proverbial 'run on the bank' amid revelations of multiple corporate failures and misuse of customer funds facilitated by 'software to conceal' it," US bankruptcy trustee Andrew R. Vara wrote in a court filing.