FTX Collapse: SBF Arrested in the Bahamas as U.S. prosecutors file criminal charges

FTX Collapse: SBF Arrested in the Bahamas as U.S. prosecutors file criminal charges

Sam Bankman-Fried, the former CEO of collapsed cryptocurrency exchange FTX, has been arrested by the Royal Bahamas Police Force.

Per a press statement, SBF’s arrest was initiated after the government of the Bahamas received a formal notification from the United States that it has filed criminal charges against him and is likely to request his extradition.

Prosecutors for the Southern District of New York (SDNY), as well as the U.S. Securities and Exchange Commission (SEC), have confirmed that SBF has been charged. The charges which relate to violations of securities laws are still under seal.

“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,” Damian William, U.S. Attorney for the SDNY, said in the statement.

The New York Times (NYT), meanwhile, reports that the charges against SBF include wire fraud, wire fraud conspiracy, securities fraud, securities fraud conspiracy, and money laundering, citing a person with knowledge of the matter.

The NYT report adds that SBF was cooperative during the arrest at his residence in the Bahamas, the apartment complex in the Albany resort. He was scheduled to appear before the Magistrate Court in Nassau, the capital of Bahamas, on Dec. 13. However, the timing of his extradition is still unclear as the process can take weeks.

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

FTX users losing hope of being made whole

Before his arrest, SBF was scheduled to testify before the  House Financial Services Committee about the exchange’s collapse. The chair of the committee, Maxine Waters, said in a statement that she was surprised to hear of SBF’s arrest at the U.S. Attorney’s office’s direction. 

Despite the latest development, FTX users do not appear to be any closer to recovering their funds locked up at the exchange. According to a Reuters report, an estimated $10 billion of users’ funds was mismanaged by FTX and its sister-firm Alameda Research.

John Ray III, the new CEO and Chief Restructuring Officer of FTX confirms that FTX ‘commingled’ user funds with Alameda’s assets in a detailed written testimony he provided ahead of his Dec. 13 appearance before the U.S. House Financial Services Committee.  

Risa Skyes
Skyes is a Senior Editor at CoinJot with a remarkable passion for Blockchain, Crypto, Metaverse, NFTs, and All things Web 3.0. Risa.Skyes [at] coinjot.com