FTX founder Sam Bankman-Fried was arrested in the Bahamas after the US filed criminal charges against him.

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FTX founder Sam Bankman-Fried was arrested in the Bahamas after the US filed criminal charges against him. Sam Bankman-Fried, the founder of FTX, was arrested by Bahamian authorities Monday evening after the United States Attorney for the Southern District of New York shared a sealed indictment with the Bahamian government, paving the way for extradition and a U.S. trial for the onetime crypto billionaire at the heart of the cryptocurrency exchange’s collapse.

His arrest marks the first concrete step taken by regulators to hold individuals accountable for FTX’s multibillion-dollar collapse last month.

Bankman-Fried was scheduled to testify virtually before the House Financial Services Committee on Tuesday before his arrest was announced, but his attorneys told CNBC that he would not appear. Rep. Maxine Waters, D-Calif., who chairs the committee, expressed surprise at his arrest and disappointment that Congress would not hear from him on Tuesday.

The United States Attorney for the Southern District of New York, Damian Williams, said on Twitter that the federal government planned to “unseal the indictment in the morning.” According to CNBC’s Andrew Ross Sorkin, the charges against Bankman-Fried include wire fraud, securities fraud, securities fraud conspiracy, and money laundering.

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Meanwhile, the SEC filed a civil complaint against Bankman-Fried on Tuesday, alleging that the ex-CEO of FTX engaged in a “scheme to defraud equity investors in FTX.” According to the filing, Bankman-Fried raised more than $1.8 billion from investors while “unbeknownst to those investors… Bankman-Fried was orchestrating a massive, years-long fraud, diverting billions of dollars of the trading platform’s customer funds for his benefit and to help grow his crypto empire.”

The collapse of FTX was precipitated by CoinDesk reporting on a highly concentrated position in self-issued FTT coins, which Bankman-hedge Fried’s fund Alameda Research used as collateral for billions of dollars in crypto loans. Binance, a competitor exchange, announced it would sell its stake in FTT, causing a massive outflow of funds.

After freezing assets, the company declared bankruptcy a few days later. Later reports claimed that FTX had mixed customer funds with Bankman-crypto Fried’s hedge fund, Alameda Research and that billions of dollars in customer deposits had been lost in the process.

John J. Ray III, who oversaw Enron’s bankruptcy, took over for Bankman-Fried. This week, Ray is scheduled to testify before Congress. Ray stated in prepared remarks released on Monday that FTX went on a “spending binge” from late 2021 to 2022, spending approximately “$5 billion buying a myriad of businesses and investments, many of which may be worth only a fraction of what was paid for them,” and that the firm made more than $1 billion in “loans and other payments… to insiders.”

Ray also confirmed media reports that FTX customer funds were mixed in with Alameda Research assets. According to Ray, Alameda used client funds for margin trading, exposing them to massive losses.

According to legal experts, if the federal government pursues wire or bank fraud charges, Bankman-Fried could face life without parole. A punishment of this severity would be unusual but not extraordinary. Bernie Madoff, the mastermind of the Ponzi scheme, was sentenced to 150 years in prison, effectively life in prison. The failure of FTX has already led to the demise of BlockFi Lending and has thrown the entire cryptocurrency space into disarray.