NEW YORK (AP) 鈥 The former CEO of failed cryptocurrency firm FTX, Sam Bankman-Fried, has been arrested in the Bahamas at the request of the U.S. government, U.S. and Bahamian authorities said Monday.
The arrest was made Monday after the U.S. filed criminal charges that are expected to be unsealed Tuesday, according to U.S. Attorney Damian Williams. Bankman-Fried had been under criminal investigation by U.S. and Bahamian authorities following the collapse last month of FTX. The firm , when it ran out of money after the cryptocurrency equivalent of a bank run.
鈥淲e expect to move to unseal the indictment in the morning and will have more to say at that time,鈥 Williams said.
Bahamian Attorney General Ryan Pinder said the Bahamas would 鈥減romptly鈥 extradite Bankman-Fried to the U.S. once the indictment is unsealed and U.S. authorities make a formal request. FTX is headquartered in the Bahamas and Bankman-Fried has largely remained in his Bahamian luxury compound in Nassau since the company's failure.
A spokesman for Bankman-Fried had no comment Monday evening. Bankman-Fried has a right to contest his extradition, which could delay but not likely stop his transfer to the U.S.
Bankman-Fried鈥檚 arrest comes just in front of the House Financial Services Committee. Rep. Maxine Waters, D-Calif., chairwoman of the committee, said she was 鈥渄isappointed鈥 that the American public, and FTX's customers, would not get to see .
Bankman-Fried was one of the world鈥檚 wealthiest people on paper, with an estimated net worth of $32 billion. He was a prominent personality in Washington, donating millions of dollars toward mostly left-leaning political causes and Democratic political campaigns. FTX grew to become the second-largest cryptocurrency exchange in the world.
, when reports called into question the strength of FTX鈥檚 balance sheet. Customers moved to withdraw billions of dollars, but FTX could not meet all the requests because it apparently used its customers deposits to cover bad bets at Bankman-Fried鈥檚 investment arm, Alameda Research.
Bankman-Fried said recently that he did not 鈥渒nowingly鈥 misuse customers鈥 funds, and said he believes his millions of angry customers will eventually be made whole.
The House Financial Services Committee is still expected to hear testimony Tuesday from current CEO John Ray III. Ray, who took over FTX on Nov. 11 and is a long-time restructuring specialist, has said in court filings that .
Bahamian authorities plan to continue their own investigation into Bankman-Fried.
鈥淭he Bahamas and the United States have a shared interest in holding accountable all individuals associated with FTX who may have betrayed the public trust and broken the law,鈥 said Bahamian Prime Minister Philip Davis, in a statement.
The U.S. Securities and Exchange Commission said it had authorized separate charges related to alleged violations of securities laws and would file them publicly Tuesday.
