The former CEO and co-founder of collapsed cryptocurrency exchange FTX has been arrested by authorities in the Bahamas.
Sam Bankman-Fried was taken into custody at the request of the US government based on a sealed indictment filed by the Southern District of New York which contains federal criminal charges.
The US Securities and Exchange Commission said it had authorised separate charges relating to alleged violations of securities laws.
Also yet to be revealed publicly, these are reported to be wire and securities fraud, conspiracy to commit wire and securities fraud and money laundering.
Extradition to the US is likely to follow.
Bankman-Fried will not now appear remotely before today’s United States House Committee hearing focused on the collapse of FTX exchange, confirmed committee chair Maxine Waters.
He had also been requested to attend a separate hearing tomorrow with the Senate Committee on Banking, but his lawyers had refused to accept a subpoena compelling this, according to Senators Sherrod Brown and Pat Toomey.
Chief restructuring officer and current FTX CEO John Ray has indicated in written testimony before his own appearance at the House Committee hearing today that FTX customer assets were “commingled” with that of Alameda Research, a crypto trading firm co-founded by Bankman-Fried which was integral to the bankruptcy of FTX.
Ray said Alameda “used client funds to engage in margin trading which exposed customer funds to massive losses”.
Listed Argo Blockchain facing bankruptcy
Cryptocurrency mining company Argo Blockchain PLC is facing potential bankruptcy after its shares were suspended from trading on the London Stock Exchange and Nasdaq in New York.
The company said it is at risk of having insufficient cash to support ongoing business operations within the next month and is in advanced negotiations with a third party to sell certain assets and engage in an equipment financing transaction.
It said it is hopeful that this will improve its liquidity and avoid a voluntary Chapter 11 bankruptcy filing in the United States, where it is also listed, adding “there is no assurance that the company can avoid such a filing”.
The company has engaged McDermott Will & Emery LLP as legal advisers, Berkeley Research Group LLC as financial advisers and Stifel GMP and its affiliate, Miller Buckfire & Co. LLC, as investment bankers.
“As part of this process, certain draft materials were inadvertently published as a test page on the company’s website,” read a statement. “The inadvertently published materials, which implied that the company was filing for Chapter 11 bankruptcy, led to the suspension of trading of the company’s securities on the London Stock Exchange and Nasdaq on Friday 9th December 2022.
“Shareholders should note that the company has not filed for bankruptcy at this time. The company has requested that the UK Financial Conduct Authority restore the listing of its ordinary shares and that is expected to happen as soon as practicable.”
At the time of writing (7am UK), the trading of Argo’s shares remains suspended.
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Cryptocurrency shorts
Crypto holding company Bitcoin Group is to buy one of the world’s oldest banks, Bankhaus von der Heydt in Germany, for $15 million. It was founded in 1754 and offers cryptocurrency trading and custody services for financial institutions and asset managers.
Binance claims a Reuters report stating that the US Department of Justice is considering prosecution of the exchange over money laundering changes is false. It accused the news agency of “attacking our incredible law enforcement team”.
OnlyFans model and former Love Island star Vanessa Sierra has closed her SmolBoyzLand NFT project amid claims of a ‘rug pull’. Launched in March, it raised 127 ETH (worth up to $400,000 at the time) in mint funds which the founders subsequently transferred to their own wallets. The collection of 9,999 NFTs with tennis-based characters – said to be inspired by Sierra’s Australian tennis player ex-boyfriend Bernard Tomic – was described as a “metaverse DAO focused on strategically acquiring blue-chip NFTS” planning “to buy up all of the land in the metaverse”.
Cryptocurrency insurance firm Evertas has raised $14m in Series A funding led by Polychain Capital.
Nillion, building Web3 infrastructure for data storage that does not use blockchain technology, has raised $20m funding led by Distributed Global.
NBA basketball legend Shaquille O’Neal is hosting a virtual reality New Year’s Eve party on Meta’s social and VR platforms featuring performances by Cardi B, Ludacris, Killer Mike and other artists. Shaq will play a set under his stage name DJ Diesel.
Crypto prices
The overall market cap of the 22,000 coins is at $843 billion at the time of writing (7am UK), a 0.2% rise in the last 24 hours.
For round-ups of recent cryptocurrency news developments, click here.
For valuations of the top 100 coins by market cap in US dollars, plus 24-hour price change, see below.