Sam Bankman-Fried has been making headlines across the globe after his arrest while at his apartment in the Bahamas.
The founder and former chief executive officer of FTX is facing eight criminal charges following the collapse of his crypto-exchange platform.
But who is Sam Bankman-Fried, what is FTX, and why was he arrested?
Who is Sam Bankman-Fried?
Sam Bankman-Fried, 30, often referred to as SBF, is an American entrepreneur, investor, and former billionaire.
He was born on the campus of Stanford University to two Stanford Law School professors.
He studied physics and mathematics at the world-famous Massachusetts Institute of Technology (MIT) before joining the proprietary trading firm Jane Street Capital.
After a few years, he moved to Berkeley and became the director of development at the Centre for Effective Altruism and then co-founded a quantitative trading firm called Alameda Research with a colleague.
Eventually, Bankman-Fried moved to Hong Kong to start Alameda Research’s cryptocurrency platform FTX.
What is FTX?
FTX was a cryptocurrency derivatives exchange company that offered consumers the chance to buy and trade cryptocurrency tokens like Bitcoin and traditional money.
It was based in the Bahamas and run by Sam Bankman-Fried, who is reported to have spent millions of dollars lobbying US legislators to institute crypto-friendly regulations.
By January 2018, SBF and his team were said to be making $1 million (£807,200) every day.
The MIT graduate was declared a billionaire in 2021, with FTX seeing billions of pounds being traded on the platform on a daily basis.
The company was valued at $32 billion (around £26 billion) in early 2022, with celebrities and public figures openly backing it.
However, it all came crashing down in early November 2022, when rumours circulated questioning the financial stability of FTX and claiming that its monetary strength mainly depended on a coin that a sister company had invented.
Other reports said that Alameda Research was using FTX’s customer deposits as loans for trading.
Then, the platform’s main competitor, Binance, publicly sold off all its crypto tokens linked to FTX, sparking panicked customers to withdraw billions of dollars from the cryptocurrency exchange.
The platform halted withdrawals while Bankman-Fried sought a financial solution, with Binance considering buying it on November 8 but then deciding to walk away.
On November 11, FTX and Alameda Research were declared bankrupt, with SBF tweeting: “I’m really sorry, again, that we ended up here.
“Hopefully things can find a way to recover. Hopefully this can bring some amount of transparency, trust and governance to them.”
He added that he “was shocked to see things unravel the way they did”.
In early December 2022, SBF was giving interviews and sharing that he was hoping to build a new business to make enough money to pay back the FTX victims who lost their money.
But, days later, he was arrested in the Bahamas.
Why was Sam Bankerman-Fried arrested in the Bahamas?
On Monday, December 12, Sam Bankman-Fried was arrested by the officers of the Bahamas Financial Crimes Investigation Unit while he was at his apartment complex in Nassau.
The arrest happened at the request of the US government based on a sealed indictment filed by the Southern District of New York.
