Embattled FTX founder Sam Bankman-Fried has been arrested in the Bahamas Monday evening after federal prosecutors in Manhattan filed criminal charges, setting the stage for extradition to the U.S.
Bahamas Attorney General Ryan Pinder announced that the Royal Bahamas Police Force had arrested Bankman-Fried in a statement following “receipt of formal notification from the United States that it has filed criminal charges against SBF and is likely to request his extradition.”
“As a result of the notification received and the material provided therewith, it was deemed appropriate for the Attorney General to seek BF’s arrest and hold him in custody pursuant to our nation’s Extradition Act,” the statement from Bahamas Attorney General read.
“The Bahamas and the United States have a shared interest in holding accountable all individuals associated with FTX who may have betrayed the public trust and broken the law,” the statement added. “While the United States is pursuing criminal charges against SBF individually, The Bahamas will continue its own regulatory and criminal investigations into the collapse of FTX, with the continued cooperation of its law enforcement and regulatory partners in the United States and elsewhere.”
U.S. Attorney for the Southern District of New York Damian Williams confirmed the arrest after prosecutors filed a “sealed indictment” charges against Bankman-Fried.
“Earlier this evening, Bahamian authorities arrested Samuel Bankman-Fried at the request of the U.S. Government, based on a sealed indictment filed by the SDNY,” Williams said in a statement posted on Twitter.
Williams added that the federal government anticipates to “move to unseal the indictment” on Tuesday morning with plans to explain more in detail regarding Bankman-Fried’s arrest.
According to the New York Times, criminal charges against Bankman-Fried include “wire fraud, wire fraud conspiracy, securities fraud, securities fraud conspiracy and money laundering.” Prosecutors in Manhattan have been examining whether FTX broke the law by transferring billions in customer funds to Alameda Research, the sister trading firm of FTX that Bankman-Fried had also founded and owned.
Several people with knowledge of the investigation told the Times that the “speed” at which federal prosecutors moved with filing criminal and civil charges was an “indication” they had received “information from cooperating witnesses.” Lawyers, according to the outlet were surprised at the “suddenness” Bankman-Fried was arrested given how complex a white-collar fraud case takes months to build before indictment.
The Securities and Exchange Commission also plans to separately file publicly on Tuesday with the Southern District of New York authorized charges related to Bankman-Fried’s violations of securities laws.
“We commend our law enforcement partners for working to secure the arrest of Mr. Sam Bankman-Fried in the Bahamas on federal criminal charges,” SEC Enforcement Director Gurbir Grewal said in a statement shared on Twitter. “The Securities and Exchange Commission has separately authorized charges relating to Mr. Bankman-Fried’s violations of our securities laws, which will be filed publicly tomorrow in the Southern District of New York.”
The embattled FTX founder was arrested at his apartment complex in the Albany resort and will be held overnight at the Bahamas police station, according to a statement from the Bahamian police force. Bankman-Fried is scheduled to appear in Magistrate Court in Nassau, Bahamas on Tuesday.
The arrest and news of indictment come shortly before Bankman-Fried was expected to testify virtually before the House Financial Services Committee on Tuesday in its first series of hearings scheduled to examine the implosion of FTX. However, the timing comes as a surprise given that prosecutors had waited 24 hours later and could have had solid sworn testimony from Bankman-Fried to use as evidence justifying his inconsistencies and undermining his credibility with a jury.
The House hearing is still scheduled to take place Tuesday morning at 10 am Eastern without Bankman-Fried testimony.
House Financial Services Committee Chairwoman Rep. Maxine Waters (D-CA) expressed disappointment that the panel will not get to hear directly from Bankman-Fried after “working diligently for the past month to secure” his testimony on the colossal collapse of his crypto exchange firm.
“I am surprised to hear that Sam Bankman-Fried was arrested in the Bahamas at the direction of the United States Attorney for the Southern District of New York. It’s about time the process to bring Mr. Bankman-Fried to justice has begun,” Waters said in a statement. “Although Mr. Bankman-Fried must be held accountable, the American public deserves to hear directly from Mr. Bankman-Fried 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. While I am disappointed that we will not be able to hear from Mr. Bankman-Fried tomorrow, we remain committed to getting to the bottom of what happened.”
Since the implosion of FTX, Bankman-Fried has been on a media blitz tour despite the advice from his attorney not to speak. During his numerous interviews in the last two weeks, the disgraced FTX CEO was given the chance to manipulate the narrative by proclaiming his contrition despite causing one of the largest financial collapses of the 21 century. Earlier during a Twitter Spaces interview with Unusual Whales, Bankman-Fried declared that he doesn’t think he would be arrested.
Bankman-Fried arrest is the first concrete move by federal prosecutors to officially charge an individual in connection to last month’s multi-billion dollar collapse of FTX. The timing of when the embattled FTX founder will be extradited to the U.S. is unclear, but the process can take weeks or longer if Bankman-Fried decides to contest the move.Alameda ResearchCryptoCrypto ReportDamien WilliamsFTXFTX CollapseHouse Financial Services CommitteeRep. Maxine WatersSam Bankman-FriedSecurities and Exchange CommissionSouthern District Of New York