Bankman-Fried was due to testify about the collapse of his cryptocurrency platform FTX before the US Congress on Tuesday.
The latest development wasn't unprecedented. Earlier this month,that various sources, including CNBC and Federal Law Enforcement agencies, were building a case to level both civil and criminal charges and private lawsuits from millions of FTX creditors against the disgraced founder.
Despite the anticipation, lawyers part of the case were surprised at the immediacy of the arrest. Earlier it was confirmed that Bankman-Fried was to testify remotely about the FTX collapse in a hearing before the House Financial Services Committee on Tuesday. Now, however, the hearing will go ahead, but without the CEO's testimony.Representative Maxine Waters, Chair of the House Financial Services Committee,following Bankman-Fried's arrest.
Waters added that the American public needed to hear directly from the founder about "the actions that’ve harmed over one million people and wiped out the hard-earned life savings of so many. The public has been waiting eagerly to get these answers under oath before Congress, and the timing of this arrest denies the public this opportunity".
Former Wall Street trader Bankman-Fried founded FTX along with ex-Google employee Gary Wang in 2019. Though the cryptocurrency exchange platform was the second largest crypto exchange in the world, the company filed for bankruptcy protection last month after users pulled $6bn from the platform in three days. There were even claims that alleged FTX was a high-tech Ponzi scheme.
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