The volatility of the Cryptocurrency market could be well understood from the Sam Bankman-Fried incident. Barely a few months ago the world was going crazy about the 30-year-old billionaire who was labelled as ‘the next Warren Buffett‘ because of his unparalleled understanding of cryptocurrency-based investment scenarios. The media is now reporting about the fall and arrest of Sam Bankman-Fried.
Bahamian authorities have arrested Sam Bankman-Fried, the former CEO of FTX, after the U.S. government brought unspecified criminal charges against them. The arrest of the former crypto billionaire was confirmed by Damian Williams, the U.S. attorney for the Southern District of New York, via Twitter.
Although not enough details related to the arrest of Sam Bankman-Fried are available yet, it is quite likely that the U.S. will request Bankman-Fried’s extradition. There is every possibility that the Bahamas authority will honour the request as they have already indicated about it.
In a statement shared with the press, Philip Davis stated that the United States and Bahamas have a common interest in holding accountable all persons associated with FTX.
The global Cryptocurrency market is going through the toughest phase of its existence and credibility. Traders and investors have been maintaining a distance from the market for some time which has resulted in Crypto winter. Sam Bankman led FTX was the fourth largest cryptocurrency exchange that collapsed in a dramatic fashion earlier this year. Failing to deal with the tough market conditions it filed for bankruptcy in November, as Bankman-Fried stepped down as CEO.
One of the major accusations that have put Bankman in trouble was his desperate move to shift funds to bet upon other Cryptocurrencies. FTX secretly loaned $10 billion of customers’ assets to Bankman-Fried’s trading firm Alameda Research, which used the funds to place bets on other cryptocurrencies, albeit without taking customers’ consent.
Due to the non-favouring market conditions, the bet didn’t pay off. It is reported that Bankman lost a minimum $1 billion worth of customer cryptocurrency while hackers stole another $500 million worth of Cryptocurrency.
The level of scandal that eventually brought FTX down was so dramatic that Amazon is already working on an eight-episode series on Sam Bankman-Fried.
Bankman arrest is also being seen as another blow to the confidence of remaining Cryptocurrency enthusiasts. All the leading Cryptocurrencies are already trading at the lowest price in the last two years. Bitcoin is down to $17,181, reaching the same price level it was in December 2020.