Bahamas Ready to Act 'Promptly' on FTX Founder Bankman-Fried's Extradition

Bahamian authorities said they are ready to act "promptly" after police on Monday arrested Sam Bankman-Fried, former CEO of the bankrupted cryptocurrency exchange FTX, in relation to sealed charges by the Department of Justice (DOJ).

According to a statement from the Royal Bahamas Police Force, Bankman-Fried was arrested "without incident" at his luxury apartment in Nassau around 6 p.m. Police said he was apprehended in "reference to various Financial Offense against laws of the United States, which are also offenses against laws of the Commonwealth of The Bahamas."

Bahamas Attorney General Ryan Pinder also released a statement on Bankman-Fried's arrest, saying that once an extradition request is made by the United States, his country "intends to process it promptly."

"While the United States is pursuing criminal charges against [Bankman-Fried] individually, the Bahamas will continue its own regulatory and criminal investigations into the collapse of FTX, with the continued cooperation of its law enforcement and regulatory partners in the United States and elsewhere," Pinder said.

Damian Williams, prosecutor for the Southern District of New York (SDNY) Justice Department, also confirmed on Twitter Monday that Bankman-Fried had been arrested "at the request of the U.S. Government, based on a sealed indictment." While Williams said his office plans to unseal the indictment Tuesday morning, a source close to the incident told The New York Times that charges include wire fraud, wire fraud conspiracy, securities fraud, securities fraud conspiracy and money laundering.

A spokesperson for SDNY said the department "cannot confirm or comment on any other individuals" when asked if any additional FTX executives were being investigated.

FTX filed for bankruptcy protection November 11 in Delaware federal court, and Bankman-Fried stepped down as head of the company. According to the Times, prosecutors have been investigating the company's "sudden implosion" from a $32 billion company to bankruptcy in a matter of days.

Bankman-Fried was scheduled to testify virtually on Tuesday before the House Committee on Financial Services prior to his arrest, reported CNBC. His attorneys told the outlet, however, that he will not testify.

Under the current extradition treaty signed by the U.S. and the Bahamas in 1990, extraditable offenses include those that break the law of both governments. The treaty also requires the requesting state to provide an arrest warrant issued by a judge or a different "competent authority."

According to Bahamian police, Bankman-Fried will appear in Nassau court on Tuesday.

Bankman-Fried founded the cryptocurrency exchange alongside his friend and business partner, Zixiao "Gary" Wang, in May 2019. The company peaked in 2021 and hosted around 1 million users who bought, sold or traded their cryptocurrencies on their website.

In recent months, however, concerns were raised over FTX's liquidity, leading to several users attempting to withdraw their holdings from the exchange. FTX, however, was not able to honor their customers' requests, which amounted to roughly $8 billion.

Newsweek has reached out to SDNY for comment.