Crypto Twitter erupts in reaction to detainment of Sam Bankman-Fried


  • Following the unexpected news of Sam Bankman’s arrest in the Bahamas, the cryptocurrency community on Twitter has erupted.
  • After learning that the US government had brought criminal charges against the discredited FTX founder, the Royal Bahamas Police seized him.
  • According to bankruptcy filings, the company owes its creditors at least $3 billion, and investigators have been looking into whether it used client money to finance Bankman-Fried investments.

Sam Bankman-Fried is accused of raising more than $1.8 billion from equity investors since May 2019 by advertising FTX as a secure, responsible platform for trading crypto assets, according to an SEC lawsuit submitted.

Following a criminal accusation from US authorities, Sam Bankman-Fried was arrested in the Bahamas. Prior to the cryptocurrency exchange filing for bankruptcy due to liquidity difficulties, Bankman-Fried created and managed FTX.

The Bahamas’ attorney general’s office announced that the arrest of Bankman-Fried had been made after receiving official confirmation of the claims against him. 

He was taken into custody without incident and will appear in Nassau’s Magistrate Court, which listed his detention as a result of several financial offenses against US laws that are also against Commonwealth of The Bahamas statutes. The US Attorney’s office in Manhattan acknowledged that Bankman-Fried had been detained in the Bahamas but would not discuss the allegations.

In a sealed indictment submitted by the US Attorney’s Office for the Southern District of New York, Samuel Bankman-Fried was detained by Bahamian authorities earlier this evening at the US Government’s request. We’ll have more to say when we seek to unseal the indictment in the morning.

In the first of several hearings to look into the demise of FTX, Bankman-Fried and current FTX CEO John Ray were scheduled to testify before the US House Financial Services Committee.

FTX’s liquidity crisis was caused by Bankman-Fried, which quoted two people with knowledge of the situation. Bankman-Fried allegedly shifted $10 billion in customer funds covertly to his private trading business, Alameda Research. The individuals asserted that at least $1 billion in client funds had vanished.

Both the Commodity Futures Trading Commission and the Securities and Exchange Commission have opened investigations.

Additionally, Bankman-Fried and a number of celebrities who supported FTX were sued by US cryptocurrency investors, who claimed their losses of $11 billion were the result of their dishonest business practices.