Sam Bankman-Fried arrested in Bahamas ahead of US criminal charges

Sam Bankman-Fried has been arrested in the Bahamas at the request of US government prosecutors who have filed criminal charges against the disgraced crypto entrepreneur.

Bahamian attorney-general Ryan Pinder said the country’s police force had taken Bankman-Fried into custody after receiving “formal notification” from the US government that it had filed criminal charges and was “likely to request his extradition”.

Damian Williams, the US attorney for the Southern District of New York, confirmed the arrest on Twitter and said the move had been taken “at the request of the US government”. An indictment will be unsealed on Tuesday morning, he added.

The arrest and criminal charges confirm that US authorities intend to pursue Bankman-Fried personally after the catastrophic collapse of FTX last month. The failure of the Bahamas-based exchange, once valued at $32bn, has resulted in potential losses for millions of creditors including retail investors and sent shockwaves through the crypto industry.

The US Securities and Exchange Commission said it would on Tuesday file separate civil charges relating to Bankman-Fried’s alleged violations of securities laws.

“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.

The Royal Bahamas Police Force said that officers from its financial crimes investigation unit had arrested Bankman-Fried shortly after 6pm ET at his apartment complex in Albany.

He was arrested in “reference to various financial offences against the laws of the United States, which are also offences against laws of the Commonwealth of the Bahamas”, the force added in a statement.

Bankman-Fried, who was “taken into custody without incident”, will appear in magistrates court in Nassau on Tuesday, according to the statement.

His arrest comes a day before he was scheduled to testify before the US House financial services committee in a hearing on the bankruptcy of FTX.

In written testimony ahead of the same hearing, published on Monday, John Ray III, FTX’s court-appointed chief executive, said the trading platform had collapsed because of “the absolute concentration of control in the hands of a very small group of grossly inexperienced and unsophisticated individuals”.

Ray added that FTX had allowed its affiliated trading firm, Alameda Research, to borrow funds from the cryptocurrency exchange “without any effective limits”.

Bankman Fried had initially suggested he would not be prepared to testify at the hearing but bowed to pressure after Maxine Waters, chair of the committee, made it clear that lawmakers were prepared to subpoena him.

Responding to Bankman-Fried’s arrest, Bahamian prime minister Philip Davis said the Caribbean nation and the US had a “shared interest in holding accountable all individuals associated with FTX who may have betrayed the public trust and broken the law”.

Davis said the Bahamian authorities would continue their own regulatory and criminal investigations into the collapse of FTX.