Washington

Sam Bankman-Fried the disgraced cryotocurrency tycoon and former CEO of now-defunct crypto platform FTX was arrested on Monday (December 12) in the Bahamas at the request of the United States.

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The arrest was made on the eve of Bankman-Fried's scheduled appearance at a US Congress hearing. He was to testify under oath about the spectacular fall of his crypto exchange.

Bankman-Fried had in recent weeks multiplied media appearances offering his version of his company's sudden failure, usually by video link from the Bahamas where his company is headquartered.

"Earlier this evening, Bahamian authorities arrested Samuel Bankman-Fried at the request of the US Government, based on a sealed indictment filed by the southern district of New York," said a tweeted statement from Damian Williams, lead prosecutor for the district.

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"We expect to move to unseal the indictment in the morning and will have more to say at that time," he added.

After reaching a valuation of $32 billion, FTX's implosion was swift following a November 2 report on ties between FTX and Alameda, a trading company also controlled by Bankman-Fried.

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The report brough to light that Alameda's balance sheet was heavily built on FTT, a cryptocurrency created by FTX that had no independent value.

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. 

Among the revelations, FTX is suspected of fraud for propping up Alameda with billions of dollars in customer funds that are now likely lost forever.

(With inputs from agencies)

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