Disgraced FTX founder Sam Bankman-Fried was arrested by authorities in the Bahamas on Monday night after criminal charges were filed against him by US prosecutors. Bankman-Fried, 30, had been hiding in the Bahamas since his $32 billion empire came crashing down last month.
According to the Office of the Attorney General in the Bahamas, Bankman-Fried was arrested on Monday after the Bahamian government received official notification of the allegations against him from the United States. American prosecutors have brought unspecified charges against him and are expected to request his extradition nearly a month after the founder of FTX filed for bankruptcy.
Nabbed Finally
News of Bankman-Fried's arrest was confirmed by U.S. Attorney for the Southern District of New York Damian Williams, who also announced that the indictment would be unsealed on Tuesday. "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 Bahamian Prime Minister's office also confirmed Bankman-Fried's arrest. "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 a statement.
'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."
According to a source with knowledge of the situation, the allegations include money laundering, securities fraud, wire fraud, and conspiracy to commit wire fraud.
The Justice Department has been investigating the shaggy-haired former billionaire ever since FTX, one of the biggest bitcoin exchanges in the world, collapsed and filed for bankruptcy protection on November 11.
FTX's handling of 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 are apparently being closely investigated by federal prosecutors.
They were reportedly also looking into whether Bankman-Fried tried to manipulate the cryptocurrency markets by orchestrating trades that caused the collapse of the TerraUSD cryptocurrency earlier this year.
Arrested Before Testifying
Bankman-Fried's arrest came just hours before the FTX CEO was scheduled to testify before the House Financial Services Committee about the $32 billion collapse of FTX. The disgraced CEO was scheduled to testify before Congress virtually owing to his "overbooked" schedule rather than in person before Bahamian authorities announced his arrest.
He was going to discuss the collapse of the digital currency with members of the House Financial Services Committee. Even though Bankman-Fried had previously stated that he will speak with Congressmen, he recently expressed his worry about being hounded by paparazzi in Washington, D.C. on Twitter.
It is currently unknown if and when the testimony will take place.
Separate from the indictment, the Securities and Exchange Commission, which had also launched an investigation, announced Monday that the watchdog had approved charges in connection with Bankman-alleged Fried's violation of securities laws.
The charges would be unsealed in the Southern District of New York on Tuesday, according to a statement from an SEC spokesperson.
Bankman-Fried, who left his position as CEO of FTX the day before the company filed for bankruptcy, has consistently denied any personal involvement in the platform's demise and distanced himself from claims of fraud, saying he "didn't ever try to commit fraud."
According to a report in Bloomberg News on Friday, investigators from the Justice Department were looking into the alleged movement of millions of dollars from just before FTX filed for Chapter 11 bankruptcy.
The outlet reported that prosecutors had a meeting to discuss a possible fraud case against the former CEO and a number of other senior company personnel. The discussion was attended by FTX's attorneys from Sullivan & Cromwel, Assistant US Attorney Nicolas Roos, Justice Department representatives from Washington, D.C., FBI agents, and other legal representatives.
According to Bloomberg, the group met for "about two hours" to talk about FTX's collapse but did not address possible charges.
Late Monday night, The New York Times confirmed the concerns regarding payments made to Alameda Research, a cryptocurrency hedge fund also owned by Bankman-Fried, utilizing U.S. customer funds. The exact charges are still unknown.
