FTX founder Sam Bankman-Fried has been arrested in the Bahamas.
The U.S. Attorney’s Office for the Southern District of New York (SDNY) announced the move Monday (Dec. 12) afternoon in a tweet attributed to U.S. Attorney Damian Williams.
USA Damian Williams: 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. We expect to move to unseal the indictment in the morning and will have more to say at that time.
— US Attorney SDNY (@SDNYnews) December 12, 2022
CNBC reported Monday that the arrest came after the SDNY shared its sealed indictment with the government of the Bahamas and that Bankman-Fried is expected to be extradited to the U.S.
Bahamas Attorney General Ryan Pinder said that the U.S. was “likely to request [Bankman-Fried’s] extradition,” suggesting that the Bahamas and the U.S. are cooperating closely, per the report.
If the U.S. federal government charges Bankman-Fried with wire fraud or bank fraud, he could face life in prison without the possibility of supervised released, CNBC reported, citing legal experts.
The arrest comes one day before Bankman-Fried was to testify — presumably virtually — before the U.S. House Financial Services Committee. The title of the Tuesday (Dec. 13) hearing is “Investigating the Collapse of FTX, Part 1.”
Rep. Maxine Waters, chairwoman of the House Financial Services Committee, expressed disappointment over the timing of the arrest.
“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,” Waters said in a Monday statement emailed to PYMNTS. “While I am disappointed that we will not be able to hear from Mr. Bankman-Fried tomorrow, we remain committed to getting to the bottom of what happened, and the Committee looks forward to beginning our investigation by hearing from Mr. John Ray III tomorrow.”
As PYMNTS reported Monday, FTX — which was once one of the biggest cryptocurrency exchanges in the world — crumbled in a matter of days after reports surfaced last month that the platform was commingling funds with its affiliated trading arm, hedge fund Alameda Research.
Bankman-Fried continues to claim he did not “knowingly commingle funds,” and has repeatedly blamed the failure on “a lack of oversight” and “pretty big mistakes I’m embarrassed to have made.”
Still, he appeared to have admitted to commingling funds during a recorded YouTube interview with “investigative crypto journalist” Coffeezilla, a conversation that has since garnered widespread mainstream coverage.
The arrest also comes on the same day that the current FTX CEO John J. Ray III, who took that position on Nov. 11 after the collapse of the firm, said in prepared testimony for the Tuesday hearing that several management practices at the FTX Group were “unacceptable.”
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