Former FTX CEO Sam Bankman-Fried arrested in the Bahamas

Sam Bankman-Fried, who founded and led FTX until a liquidity crunch forced the cryptocurrency exchange to declare bankruptcy last month, was arrested on Monday in the Bahamas at the request of the US government, said a Reuters report.

“Earlier this evening, 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," US Attorney Damian Williams said in a statement. He said he expected the indictment would be unsealed on Tuesday.

Bankman-Fried's arrest comes just a day before he was due to testify in front of the House Financial Services Committee, along with the company's current CEO, John Ray III.

Launched in 2019 and based in the Bahamas, FTX filed for bankruptcy November 11 after it struggled to raise money to stave off collapse as traders rushed to withdraw $6 billion from the platform in just 72 hours. Since then, it has emerged that Bankman-Fried secretly used $10 billion in customer funds to prop up his trading business.

Bankman-Fried said recently that he did not “knowingly” misuse customers' funds, and that he believes his millions of angry customers will eventually be made whole.

A spokesperson for Bankman-Fried declined to comment on what the charges were.

Separately, the Securities and Exchange Commission (SEC) said it also plans to file charges against Bankman-Fried for violating US securities law.

The arrest marks a stunning fall from grace for the 30-year-old entrepreneur who rode a cryptocurrency boom to create one of the world's largest cryptocurrency exchanges, and a net worth that Forbes pegged a year ago at $26.5 billion.