Sam Bankman-Fried, the former CEO of the collapsed crypto exchange FTX, was arrested by Bahamas law enforcement on Monday night.
“The SBF was arrested after receiving official notice from the United States that it had filed a criminal complaint against SBF and is likely to request his extradition,” the Bahamas government said. in a statement Monday night.
Bankman-Fried’s arrest is the first step in a multi-stage legal process to transfer the one-time crypto billionaire to U.S. custody.
Prosecutors from the Southern District of New York said they would unseal the indictment against Bankman-Fried on Tuesday morning. The The New York Times reported that charges would include wire fraud, wire fraud conspiracy, securities fraud, securities fraud conspiracy, and money laundering. The Securities and Exchange Commission also said it would announce charges against the FTX CEO on Tuesday.
The United States and the Bahamas have had extradition proceedings since 1994, when An agreement signed by the two countries has entered into force. Extradition is a legal process in which one jurisdiction—in this case, the United States—requires another jurisdiction—in this case, the Bahamas—to hand over an accused person to may be prosecuted.
At this time, the United States has not made a formal extradition request to the Bahamas. But Return Treaty allows the Bahamas to make a “temporary arrest” at the urging of the United States before a formal extradition request is made. A detainee may be detained for up to 60 days pending a formal request.
If the Bahamas agrees to extradite Bankman-Fried, it will hand over the former FTX CEO to the US, along with any other key evidence collected in the Bahamas. But the Caribbean nation may decide to postpone the Bankman-Fried transfer as it conducts its own investigation.
“While the United States is pursuing criminal charges against the SBF alone, the Bahamas will continue its own criminal and legal investigations into the collapse of FTX, with the continued cooperation of the law enforcement partners and regulators in the United States and elsewhere,” Philip Davies, prime minister of the Bahamas, said in statement in Monday.
The Bahamas’ acceptance of the US extradition request does not imply guilt. “If you are right in the law, the proceedings don’t really involve a fact-based trial. Harry Sandick, a partner at Patterson Belknap Webb & Tyler LLP, speaking Insiders.
And extradition is not always successful.
In 2013, the United States tried to extradite Edward Snowden, a whistleblower whistleblower from the National Security Agency, from the semi-autonomous Chinese city of Hong Kong. The city government was reluctant to comply with the request, possibly due to Snowden’s claims that the US was spying on both mainland China and Hong Kong. City finally allowed Snowden left the city, claiming that the United States had sent a false request. (America suspend the extradition treaty with Hong Kong in 2020 after Beijing imposed a national security law on the city).
Then, in 2018, Canadian authorities arrested Huawei CFO Meng Wanzhou at the request of the United States, which hopes to extradite her to face charges of fraud and evasion of sanctions. . Beijing quickly arrested two Canadians, Michael Kovrig and Michael Spavor, and tied their fate to the outcome of Ms. Meng’s extradition request. Meng’s extradition hearings begin in January 2020 and run until September 2021, when the United States agree to delay Prosecuting Ms. Meng, allowing Huawei CFO to leave Canada Beijing released “two Michaels” shortly after.
Extradition of the FTX CEO does not appear to be too difficult. Bankman-Fried is scheduled to appear at Magistrates Court in Nassau, the capital city of the Bahamas, on Tuesday, according to The New York Times.
But there is one scheduled event that Bankman-Fried may no longer be attending: his hearing before the US House of Representatives Financial Services Committee tomorrow, where he plans to appear almost.
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