Sam Bankman-Fried CEO and founder of crypto exchange FTX and Democrat mega-donor, has been arrested just hours before appearing before the House

Sam Bankman-Fried, founder and former CEO of FTX (cryptocurrency exchange platform), was arrested in the Bahamas following charges brought against him by the United States.

As indicated by Attorney General Damian Williams, Bahamian law enforcement authorities acted swiftly after receiving formal notice of criminal charges being filed against the founder after his cryptocurrency company went bankrupt.

"The Bahamas and the United States in holding accountable all individuals associated with FTX who may have betrayed the public trust and broken the law," said Prime Minister Philip Davis.

Bankman was already scheduled to testify virtually before a House committee on Tuesday. However, this appointment may not take place now, as FTX's CEO will remain in custody pending a formal request to extradite him.

"At such time as a formal request for extradition is made, The Bahamas intends to process it promptly, pursuant to Bahamian law and its treaty obligations with the United States," Bahamian Prime Minister Philip Davies said in a statement.

Meanwhile, the archipelago's authorities said they will conduct their own "regulatory and criminal investigations" into FTX's failure.

Denies having committed fraud

Shortly after the cryptocurrency company filed for bankruptcy, Bankman-Fried gave several interviews where he claimed that FTX's liquidity problems were due to risk management failures.

"I never intended to commit fraud," the company's founder allayed."

However, the current head of FTX, John Ray believes that much of the company's assets may have been stolen. He also denounced a "total absence of corporate controls."

It should be recalled that the company was so successful that it was valued at more than 30 billion dollars and went bankrupt on November 11 after its clients withdrew their assets due to doubts about its financial soundness.

According to Bankman the massive sale of cryptocurrencies reduced the company's collateral by half, which was then worsened by a credit crunch and a "run on the bank," leaving collateral of only 9 billion and therefore driving FTX into bankruptcy.