Former FTX CEO Sam Bankman-Fried has been arrested in the Bahamas and charged with crypto investor fraud

NEW YORK — The U.S. Securities and Exchange Commission on Tuesday indicted Sam Bankman-Fried, the embattled former CEO of cryptocurrency giant FTX and trading firm Alameda Research, for defrauding investors.

“The collapse of FTX underscores the very real risks that unregistered crypto-asset trading platforms can pose to investors and customers alike,” Gurbir S. Grewal, director of the SEC’s Enforcement Division, said in a statement.

Bankman-Fried was arrested in the Bahamas on Monday after federal prosecutors in New York filed a criminal complaint, which was contained in a sealed indictment, according to the Royal Bahamas Police Force.

Damian Williams, US Attorney for the Southern District of New York, said Monday certain charges are expected to be unsealed Tuesday.

In a statement, Williams said: “Tonight, Bahamian authorities arrested Samuel Bankman-Fried at the request of the US government, based on a sealed indictment filed by the United States Attorney’s Office for the Southern District of New York. We expect to unseal the indictment tomorrow morning and have more to say at this point.”

A source familiar with the allegations told ABC News that Bankman-Fried faces multiple count fraud charges coming a month after FTX filed for $32 billion in bankruptcy.

The arrest “followed receipt of formal notification from the United States that it has filed criminal charges against SBF and will likely seek his extradition,” the Bahamas Attorney General’s office said.

Bankman-Fried is scheduled to appear in a courtroom in Nassau, Bahamas, Tuesday morning before being eventually transferred to New York for arraignment. The exact time of his delivery was not clear on Monday evening. He was also scheduled to appear before Congress on Tuesday.

Since the collapse of FTX, federal prosecutors in the Southern District of New York have been investigating Bankman-Fried, sources told ABC News.

The Southern District declined to comment on the arrest.

The SEC said Monday it had “authorized separate indictments for his securities law violations to be publicly filed in the SDNY tomorrow.”

In response to the arrest announcement, Prime Minister of the Bahamas Philip Davis said: “The Bahamas and the United States have a common interest in holding accountable all individuals associated with FTX who may betray public trust and that.” have broken the law.”

“While the United States pursues criminal charges against SBF individually, the Bahamas will continue its own regulatory and criminal investigation into the collapse of FTX, with the continued cooperation of its law enforcement and regulatory partners in the United States and elsewhere,” he added.

FTX, once a crypto darling, filed for bankruptcy protection in November after a rival cryptocurrency exchange announced it was pulling out of a plan to acquire it.

Bankman-Fried was scheduled to appear before Congress Tuesday to testify before the House Financial Services Committee in a hearing titled “Inquiry into FTX Collapse, Part 1.” Rep. Maxine Waters, chair of the committee, said in a statement Monday night that she was “surprised” to hear of the arrest.

“While I am disappointed that we will not be hearing from Mr Bankman-Fried tomorrow, we remain committed to getting to the bottom of what has happened and the Committee looks forward to beginning our inquiry by hearing from Mr John Ray III hear tomorrow,” she added.

John Ray, FTX’s new CEO, who steered the company through the bankruptcy proceedings, is still expected to testify.

Bankman-Fried had said in a series of tweets he was “available to testify” after initially defying the committee’s request.

“I still don’t have access to a lot of my data – professionally or privately. As such, there is a limit to what I can say, and I will not be as helpful as I would like,” Bankman-Fried wrote. “But since the committee still thinks it makes sense, I’m ready to testify on the 13th.”

In an interview with ABC News’ George Stephanopoulos, Bankman-Fried denied knowing “that client funds were being misused.”

ABC News’ Jasper Williams, Alexandra Hutzler, Kirit Radia, Mark Guarino, and Rebecca Jarvis contributed to this report.

Copyright © 2022 ABC News Internet Ventures. Former FTX CEO Sam Bankman-Fried has been arrested in the Bahamas and charged with crypto investor fraud

Laura Coffey

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