The founder of the failed cryptocurrency exchange FTX has been arrested in the Bahamas, and federal prosecutors in the United States have filed charges in New York.
“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,” U.S. Attorney Damian Williams wrote in a statement shared on Twitter. “We expect to move to unseal the indictment in the morning and will have more to say at that time.”
The specific charges were not revealed. But the Royal Bahamas Police Force said in a news release that Bankman-Fried was arrested in reference to “various Financial Offences against laws of the United States, which are also offences against laws of the Commonwealth of The Bahamas.” Bankman-Fried will appear in local court on Tuesday, the release said.
FTX was a global company with more than 130 affiliates that allowed individual investors to trade cryptocurrencies, growing to be the third-largest exchange by volume. The company’s commercials featured prominent celebrities, and its logo appeared on an NBA stadium and on MLB umpire uniforms.
The New York Times and Coindesk first reported this story.
Bankman-Fried had been scheduled to appear before Congress Tuesday morning but that apparently won’t happen, according to Maxine Waters (D-CA), Chairwoman of the House Financial Services Committee.
Waters questioned the timing of the arrest.
“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,” Waters said. “It’s about time the process to bring Mr Bankman-Fried to justice has begun. However, as the public knows, my staff and I have been working diligently for the past month to secure Mr Bankman-Fried’s testimony.”
She added: “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.”
Bankman-Fried said in a recent tweet that he would try to shed light on what led to the crypto exchange’s crash and his own failings as the former CEO.
“I still do not have access to much of my data – professional or personal. So there is a limit to what I can say, and I won’t be as helpful as I’d like,” Bankman-Fried said on Twitter. “I will try to be helpful during the hearing.”
USA TODAY’s inquiry to Bankman-Fried’s spokesman, Mark Botnick, was not immediately returned. Botnick confirmed earlier in the day the FTX founder was being represented by white-collar criminal defence attorney Mark S. Cohen, who did not immediately respond to USA TODAY’s inquiry.
Bahamian Attorney General Ryan Pinder said in a news release that Bankman-Fried was arrested around 6 p.m. local time and is being held in custody “pursuant to our nation’s Extradition Act.”
Bahamian Prime Minister Philip Davis said the two countries “have a shared interest in holding accountable all individuals associated with FTX who may have betrayed the public trust and broken the law.”
“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,” he said.
Multiple news outlets had already reported that FTX is the subject of investigations by the U.S. Securities and Exchange Commission, which enforces civil regulations, and the U.S. Department of Justice, which can bring criminal charges. State and international regulators have also raised concerns about the company.
