Sam Bankman-Fried, the co-founder and former CEO of collapsed crypto trade FTX, was arrested Monday within the Bahamas, the lawyer common’s workplace for the Bahamas mentioned in an announcement.

The arrest got here after the US authorities notified the workplace that it had filed legal expenses towards Bankman-Fried and would doubtless search extradition, the Bahamas AG workplace mentioned. 

Damian Williams, the US Lawyer for the Southern District of New York, confirmed Monday’s arrest and unsealed the 14-page indictment Tuesday. Bankman-Fried faces eight counts of conspiracy and legal exercise associated to wire fraud, commodities fraud, securities fraud, cash laundering and violation of marketing campaign finance legal guidelines. 

Individually, the US Securities and Trade Fee filed civil expenses on Tuesday towards Bankman-Fried for allegedly violating securities legislation and “orchestrating a scheme to defraud fairness traders in FTX Buying and selling Ltd.”

At this time we charged FTX Buying and selling Ltd CEO and co-founder Samuel Bankman-Fried with orchestrating a scheme to defraud fairness traders. Investigations as to different securities legislation violations and into different entities and individuals regarding the alleged misconduct are ongoing.

— U.S. Securities and Trade Fee (@SECGov) December 13, 2022

“We allege that Sam Bankman-Fried constructed a home of playing cards on a basis of deception whereas telling traders that it was one of many most secure buildings in crypto,” SEC Chair Gary Gensler mentioned in an announcement. “The alleged fraud dedicated by Mr. Bankman-Fried is a clarion name to crypto platforms that they should come into compliance with our legal guidelines.” 

Compliance measures embody “time-tested safeguards, comparable to correctly defending buyer funds and separating conflicting traces of enterprise,” Gensler mentioned.

A Justice of the Peace choose within the Bahamas on Tuesday denied Bankman-Fried’s request to be launched on bail, citing a heightened danger of flight and ruling that the onetime billionaire ought to keep in Bahamian custody till Feb. 8, 2023.

Bankman-Fried, also called SBF, resigned as FTX’s CEO in November after the beleaguered cryptocurrency platform filed for Chapter 11 chapter safety. The Bahamas-based trade had been one of many greatest gamers in cryptocurrency, and Bankman-Fried was famend for his lobbying of politicians on either side of the aisle. However FTX’s meltdown has raised doubts about cryptocurrency and has left prospects questioning if they’re going to ever get their a refund. 

Revelations concerning the holdings and the shut relationship between FTX and sister buying and selling agency Alameda Analysis — over a 3rd of the belongings on Alameda’s stability sheet had been FTT tokens issued by FTX — triggered a cascading sequence of occasions in November that led Alameda to stop operations and FTX to file for chapter safety. Billions in traders’ funds seemingly vanished in a single day. 

“I used to be the CEO of FTX. Meaning I used to be accountable,” Bankman-Fried mentioned throughout a reside interview at The New York Instances’ Dealbook Summit on Nov. 30. He has denied any legal wrongdoing or intent.

The US Division of Justice and different companies are investigating allegations of fraud and mishandling of funds by FTX. Bankman-Fried has denied committing fraud or purposely misusing buyer cash.

Bankman-Fried had agreed to testify on Tuesday to the US Home Monetary Providers Committee. The listening to went on with out him. Forbes obtained and revealed a draft of Bankman-Fried’s ready testimony for the listening to, wherein he mentioned his main focus was to “do proper by the shoppers of FTX Worldwide who had been harm.” 

At Tuesday’s listening to, the brand new CEO of FTX John Ray spoke as a substitute. He known as the FTX collapse “plain, previous embezzlement.”

Philip Davis, the Bahamas’ prime minister, mentioned his nation is conducting its personal legal and regulatory investigations into FTX’s collapse.

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