Following the filing of criminal charges by US prosecutors against Sam Bankman-Fried, founder of the now collapsed and bankrupt cryptocurrency exchange FTX was arrested in the Bahamas on Monday by The Royal Bahamas Police Force.
In what is the latest development putting cryptocurrencies and their exchanges in yet another unwanted limelight,the Bahamian authorities picked up the disgraced founder and arrested him at his apartment complex shortly after 6 PM ET on Monday. He is slated to appear in Magistrate Court in Nassau on Tuesday. A spokesman for Bankman-Fried declined to comment.
The government of Bahamas informed in a statement that the arrest followed the “receipt of formal notification from the United States that it has filed criminal charges against S.B.F. and is likely to request his extradition.” Bankman-Fried is also scheduled to testify before Congress in a remote manner – something he was initially hesitant to do as his lawyers refused to accept a subpoena. Bankman-Fried maintained at that time that he did not believe that he could provide satisfactory answers to Congress.
The charges filed against Bankman-Fried include the conspiracy to commit wire fraud and securities fraud, securities fraud, wire fraud, and money laundering. The SEC has filed a set of charges on its own – ones that relate to “violations of our securities laws, which will be filed publicly tomorrow in the Southern District of New York.”
For Bankman-Fried, a lengthy stay in prison is not entirely out of the cards, especially if he fails to satisfy Congress at his hearing and the Bahamian government uncovers something in its own criminal investigation into FTX and its activities, which will be conducted in cooperation with law enforcement and other regulatory authorities, both in the US and “elsewhere.”
“Earlier this evening, Bahamian authorities arrested Samuel Bankman-Fried at the request of the US government, based on a sealed indictment filed by the SDNY,” US attorney Damian Williams said as the Southern District of New York, which is investigating the sudden collapse of FTX, confirmed the arrest in a tweet. “We expect to move to unseal the indictment in the morning and will have more to say at that time.”
All of this follows FTX’s dramatic collapse last month – which saw both the crypto exchange and the billionaire fall from grace and add to the volatility of the already-volatile crypto market. Bankman-Fried, who was formerly touted to be the savior of the crypto industry, saw his crypto empire crumble in a short period of time after an $8 billion hole was revealed in the company’s finances. He failed to secure a lifeline from Binance, and last month, FTX filed for bankruptcy. It now owes millions – even billions – to its creditors.