FTX’s Sam Bankman-Fried Arrested In Bahamas

The arrest was the latest stunning development in one of the most dramatic corporate collapses in recent memory.

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Bankman-Fried, 30, was set to testify before Congress yesterday about the collapse of FTX, which was one of the most powerful firms in the emerging crypto industry until it imploded virtually overnight last month after a run on deposits revealed a $8 billion hole in its accounts.

Prosecutors in the Southern District of New York confirmed the charge against Bankman-Fried and said an indictment would be unsealed yesterday.

Separately, the Securities and Exchange Commission said in a statement that it had authorised charges “relating to Mr. Bankman-Fried’s violations of our securities laws.”

According to a source familiar with the situation, Bankman-Fried was charged with wire fraud, wire fraud conspiracy, securities fraud, securities fraud conspiracy, and money laundering.

The person said that Bankman-Fried, who was the only person charged in the indictment, was taken into custody by Bahamian authorities.

According to a Bahamian police statement, he was arrested shortly after 6 p.m. at his apartment complex in the Albany resort in the Bahamas.

It was unclear when Mr. Bankman-Fried might be transferred to the United States. While the Bahamas has an extradition treaty with the US, the process can take weeks, if not months, if a criminal defendant contests it.

According to a source familiar with the situation, Bankman-Fried was cooperative during his arrest and will be held overnight in a police station cell. He was due to appear in Magistrate Court in Nassau, the Bahamas’ capital, on Tuesday.

Bankman-spokesman Fried’s declined to comment. A spokesman for the US Attorney’s Office, Nicholas Biase, also declined to comment.

The abrupt collapse of the crypto exchange has stunned the industry.

Federal prosecutors are reportedly looking into whether Bankman-Fried manipulated the market for two cryptocurrencies, causing them to crash.

Bankman-Fried’s mother and father, who teach at Stanford Law School, are under scrutiny for their connections to their son’s crypto business.

“Earlier this evening, Bahamian authorities arrested Samuel Bankman-Fried at the request of the U.S. government, based on a sealed indictment,” Damian Williams, the U.S. attorney for the Southern District of New York, said in a statement.

“We expect to move to unseal the indictment in the morning and will have more to say at that time.”

Bankman-Fried, once a crypto industry darling and a major Democratic Party donor, has seen his vast business and political empire crumble with startling speed. His exchange declared bankruptcy last month, and his personal fortune has shrunk to almost nothing. While he was once hailed as a modern-day John Pierpont Morgan, he is now more frequently compared to Bernie Madoff, the mastermind behind the largest Ponzi scheme in history.

The arrest came as a surprise to the lawyers involved in the case.

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Bankman-Fried was widely expected to face criminal charges. However, complex white-collar fraud cases can take months to develop. He was scheduled to testify remotely about the FTX collapse in front of the House Financial Services Committee on Tuesday, prior to his arrest.

“The American public deserves to hear directly from Mr. Bankman-Fried about the actions that’ve harmed over one million people,” Representative Maxine Waters, who chairs the committee, said in a statement. “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.”