FTX Founder Sam Bankman-Fried Arrested, Bahamas Says

December 12, 2022 in News by RBN Staff


Source: CoinDesk.com

U.S. authorities filed criminal charges against Bankman-Fried, and The Bahamas intends to extradite him once U.S. officials request it.



The Royal Bahamas Police Force arrested FTX founder Sam Bankman-Fried, a press statement said.

The arrest came after the U.S. filed criminal charges against Bankman-Fried, the statement said, and the nation expects the U.S. to request The Bahamas extradite Bankman-Fried in short order.

“As a result of the notification received and the material provided therewith, it was deemed appropriate for the Attorney General to seek SBF’s arrest and hold him in custody pursuant to our nation’s Extradition Act,” the statement, attributed to Attorney General Ryan Pinder, said. “At such time as a formal request for extradition is made, The Bahamas intends to process it promptly, pursuant to Bahamian law and its treaty obligations with the United States.”

A tweet from the U.S. Attorney’s Office for the Southern District of New York confirmed that prosecutors in the U.S. indicted Bankman-Fried, though the indictment remains under seal.

According to the New York Times, the charges could include wire fraud, securities fraud, money laundering and related conspiracy charges.

The U.S. Securities and Exchange Commission also plans to bring charges, a statement from Enforcement Director Gurbir Grewal said.

“We commend our law enforcement partners for working to secure the arrest of Mr. Sam Bankman-Fried in the Bahamas on federal criminal charges,” he said. “The Securities and Exchange Commission has separately authorized charges relating to Mr. Bankman-Fried’s violations of our securities laws, which will be filed publicly tomorrow in the Southern District of New York.”

In the Bahamas’ statement, Bahamas Prime Minister Philip Davis said the country would continue pursuing its own investigation into FTX’s collapse, alongside the U.S.’s criminal charges.

Bankman-Fried was set to testify virtually before the House Financial Services Committee about the exchange’s collapse on Tuesday. Spokespeople for both the Chair and Ranking Member did not immediately return requests for comment.

CoinDesk - Unknown

In a separate news release, the Royal Bahamas Police Force said officers with its Financial Crimes Investigation Unit arrested Bankman-Fried around 6:00 p.m. local time.

“He was arrested reference to various Financial Offences against laws of the United States, which are also offences against laws of the Commonwealth of The Bahamas,” the document said.

Bankman-Fried will appear in court on Tuesday in the Bahamas. Mark Cohen, Bankman-Fried’s attorney, did not immediately return a request for comment.

FTX fell last month after a CoinDesk report revealed that Alameda Research, a sister company also founded by Bankman-Fried, held a large number of FTT tokens, which are issued by FTX.

FTX filed for bankruptcy just over a month ago. Its new CEO, John J. Ray III, said in court filings and prepared Congressional testimony that he had never seen anything quite like the corporate governance and documentation failures that he found at FTX.

Among other issues, he found that FTX had heavily commingled customer and corporate assets, losing billions along the way. In his prepared remarks, published earlier Monday, he said his new team had managed to secure about $1 billion of company assets to date.

For his part, Bankman-Fried went on a press tour after leaving his company, speaking to the New York Times, New York Magazine, Vox and numerous other news outlets. He spoke at a Twitter Spaces and in a live Forbes interview earlier on Monday.

UPDATE (Dec. 12, 2022, 23:45 UTC): Adds additional comment.

UPDATE (Dec. 13, 00:30 UTC): Adds statement from SDNY, additional context.

UPDATE (Dec. 13, 01:01 UTC): Adds statement from Bahamas police.

UPDATE (Dec. 13, 01:45 UTC): Adds additional detail about charges and SEC action.