Prosecutors to unseal indictment in FTX case

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Prosecutors to unseal indictment in FTX case

Prosecutors have unseald an indictment on the same day to Tell Congress what went wrong at the Exchange.

One month after FTX, the No. 2 cryptocurrency exchanges worldwide, including the Bahamas, collapsed amid allegations of self-dealing, police in the Bahamas arrested its co-founder and former CEO, Sam Bankman-Fried, at the request of U.S. prosecutors.

Damian Williams, the U.S. attorney in Manhattan, said Bahamanian officials were acting on his office's request and that prosecutors plans to unseal an indictment Tuesday morning against the 30-year-old entrepreneur.

The island nation's attorney general said it has asked the state's attorney general to issue a statement.

The office said it will quickly process Bank-Fried's extradition to the United States.

He plans to describe how FTX didn't maintain records of its transactions and 'comingled assets' between the exchange and Alameda Research, which also controlled the crypto hedge fund Bankman-Fried.

Senior management had access to stored customer assets such as crypto tokens without security controls to prevent redirecting those assets, Ray said. He further plans to provide details on how Alameda borrowed money held by FTX for its own trading or investments without effective limits and had a lack of documentation for transactions involving almost 500 investments made with FTX's assets and assets.

The SEC also is expected to file a lawsuit on Tuesday against Bankman-Fried.

The speed of criminal actions in the FTX case us startling, he said. It was only in early November that the collapse of the exchange rocked the crypto world as one of its most notable champions filed for bankruptcy and converted up to 1M customers into creditors.

The failure of FTX and Alameda came under scrutiny after news emerged that 40 percent of the hedge fund's balance sheet relied on FTX's homegrown token, FTT. The revelation raised questions about Alameda's financial position and led Binance to announce that it was preparing to sell off $500M worth of FTT, which it acquired as an early investor ion FTX. The transaction triggered a wave of withdrawals at FTX, leaving it effectively insolvent.

FTX filed for chapter 1d1 bankruptcy, and SBF resigned on Nov. 11 after 10B in customer assets were identified as missing from the platform.

Bankman-Fried has argued in numerous media interviews that he did not knowingly defraud customers but made honest mistakes.