Sam Bankman-Fried, the disgraced co-founder of digital-asset exchange FTX, was arrested in the Bahamas after the US government filed a criminal indictment, following weeks of speculation that client funds were misused before his empire’s collapse.
Bankman-Fried is being held in custody pending an extradition process, the island nation’s attorney general, Ryan Pinder, said in a statement Monday. Disgraced crypto king Sam Bankman-Fried was arrested by authorities in the Bahamas Monday night after criminal charges were filed by US prosecutors.
The 30-year-old was taken into custody after the Bahamian government received formal notification from the US of the charges against him, according to the Office of Attorney General in the Bahamas.
“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 tweeted. “We expect to move to unseal the indictment in the morning and will have more to say at that time.”
The charges include wire fraud, wire fraud conspiracy, securities fraud, securities fraud conspiracy and money laundering, the New York Times reported, citing a person with knowledge of the matter.
The shaggy-haired former billionaire has been under investigation by the Justice Department ever since FTX — which had been among the world’s largest cryptocurrency exchanges — imploded and filed for bankruptcy protection on Nov. 11.Federal prosecutors have reportedly been scrutinizing how FTX handled customer funds and the alleged transfer of hundreds of millions of dollars from the US to the Bahamas around the time of the bankruptcy filing.
They were also said to be probing whether Bankman-Fried manipulated crypto markets by orchestrating trades that led to the collapse of the TerraUSD cryptocurrency earlier this year.
Separate from the indictment, the Securities and Exchange Commission – which had also opened a probe — said Monday the regulator had authorized charges related to Bankman-Fried’s alleged violation of securities laws.
A SEC official said in a statement that the charges would be filed publicly in the Southern District of New York on Tuesday.News of his arrest came one day before US lawmakers were scheduled to grill Bankman-Fried over FTX’s disastrous collapse on Capitol Hill in Washington DC on Tuesday.
Hours before he was nabbed, Bankman-Fried had said he would be testifying remotely before the House Financial Services Committee because he was “quite overbooked” and had security concerns about traveling to DC.It wasn’t immediately clear how quickly that would occur.
“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,” Bahamian Prime Minister Philip Davis said in the wake of his arrest.
“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.” In a statement, Williams said: “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 United States Attorney’s Office for the Southern District of New York. We expect to move to unseal the indictment in the morning and will have more to say at that time.”
A source familiar with the charges told ABC News that Bankman-Fried is facing a multi-count fraud indictment that comes one month after FTX filed a $32 billion bankruptcy.
The arrest “followed receipt of formal notification from the United States that it has filed criminal charges against SBF and is likely to request his extradition,” the Bahamas Attorney General’s Office said.
Bankman-Fried is due to appear in a courtroom in Nassau, Bahamas, Tuesday morning before his eventual transfer to New York for prosecution. The exact timing of his extradition was not clear Monday night. He was also due to appear before Congress on Tuesday.Since the collapse of FTX, federal prosecutors in the Southern District of New York have been looking at Bankman-Fried, sources have told ABC News.
The Southern District declined to comment on the arrest.
The U.S. Securities and Exchange Commission said it “has authorized separate charges relating to his violations of securities laws, to be filed publicly tomorrow in SDNY.””I still do not have access to much of my data — professional or personal. So there is a limit to what I will be able to say, and I won’t be as helpful as I’d like,” Bankman-Fried wrote. “But as the committee still thinks it would be useful, I am willing to testify on the 13th.”
Bankman-Fried, in an interview with ABC News’ George Stephanopoulos, denied that he knew “that there was any improper use of customer funds.”
Bankman-Fried, was arrested without incident at his apartment complex shortly after 6 pm ET Monday in Nassau, and is set to appear in court Tuesday, the Royal Bahamas Police Force said in a statement.
A representative for Bankman-Fried’s legal team didn’t immediately respond to CNN’s request for comment.
Shortly after the SDNY confirmed his arrest, the Securities and Exchange Commission said it had authorized separate charges relating to Bankman-Fried’s “violations of securities laws,” which will be filed publicly on Tuesday.
It’s unclear what charges await Bankman-Fried, the 30-year-old crypto celebrity who became a pariah overnight last month as his company suffered a liquidity crisis and filed for bankruptcy, leaving at least a million depositors unable to access their funds.The United States’ extradition treaty with the Bahamas allows US prosecutors to return defendants to American soil if the charges would be considered punishable by imprisonment of at least a year in both jurisdictions.
In the four weeks since FTX filed for bankruptcy, Bankman-Fried has sought to cast himself as a somewhat hapless chief executive who got out over his skis, denying accusations that he defrauded FTX’s customers.
“I didn’t knowingly commit fraud,” he told the BBC over the weekend. “I didn’t want any of this to happen. I was certainly not nearly as competent as I thought I was.”Bankman-Fried has denied knowingly commingling funds and sought to distance himself from the day-to-day management of Alameda, which made a number of high-risk trading strategies such as arbitrage and “yield farming,” aka investing in digital tokens that pay interest-rate-like rewards, according to reporting from The Wall Street Journal.
He has admitted to mismanaging FTX and not paying enough attention to risk.
“Look, I screwed up,” he said at the New York Times’ DealBook Summit late last month. “I was CEO of FTX…I had a responsibility.”
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