The founder of the defunct FTX crypto exchange has been arrested at the request of federal authorities.
Sam Bankman-Fried was detained in the Bahamas at the behest of US authorities, who have brought criminal charges against the disgraced crypto entrepreneur.
According to Bahamas Attorney-General Ryan Pinder, the country's police force detained Bankman-Fried after getting "formal information" from the US government that it had filed criminal charges against him and was "expected to pursue his extradition."
Damian Williams, the United States Attorney for the Southern District of New York, confirmed the arrest on Twitter, saying it was made "at the request of the US government." He also stated that an indictment will be unsealed on Tuesday morning.
The arrest and criminal charges show that US authorities aim to pursue Bankman-Fried personally in the aftermath of FTX's disastrous collapse last month. The demise of the Bahamas-based exchange, which was once worth $32 billion, has led in possible losses for millions of creditors, including retail investors, and has sent shockwaves across the cryptocurrency sector.
The US Securities and Exchange Commission announced on Tuesday that it would pursue separate civil charges against Bankman-Fried for suspected securities law violations.
“We commend our law enforcement partners for working to secure the arrest of . . . Bankman-Fried in the Bahamas on federal criminal charges,” Gurbir Grewal, director of the SEC’s division of enforcement, said in a statement.
Officers from the Royal Bahamas Police Force's financial crimes investigation section apprehended Bankman-Fried just after 6 p.m. ET at his Albany apartment complex.
He was arrested in "relation to multiple financial offences against the laws of the United States, which are also offences against the laws of the Commonwealth of the Bahamas," according to the police force.
According to the statement, Bankman-Fried was "taken into custody without incident" and will appear in Nassau magistrates court on Tuesday.
His arrest comes only a day before he was supposed to appear before the US House Financial Services Committee about FTX's bankruptcy.
In written testimony released ahead of the same hearing on Monday, FTX's court-appointed CEO, John Ray III, stated that the trading platform failed due to "the utter concentration of control in the hands of a very small group of extremely incompetent and unsophisticated persons."
Ray went on to say that FTX had given its connected trading firm, Alameda Research, permission to borrow funds from the bitcoin exchange "without any effective limits."
Banker Fried initially stated that he would not be willing to speak at the hearing, but bowed to pressure after committee chair Maxine Waters stated that lawmakers were willing to subpoena him.
In response to Bankman-arrest, Fried's Bahamian Prime Minister Philip Davis stated that the Caribbean country and the United States shared a "common interest in holding accountable all people affiliated with FTX who may have breached the public trust and broken the law."
Davis stated that the Bahamas' regulatory and criminal investigations into the collapse of FTX would continue.
By fLEXI tEAM