Former FTX CEO Sam Bankman-Fried Arrested in the Bahamas: What Happens Next?

Sam Bankman-Fried, the former CEO of collapsed cryptocurrency exchange FTX, has been arrested by Bahamian law enforcement on Monday evening.

“SBF’s arrest follows receipt of official notification from the United States that he has filed criminal charges against SBF and is likely to seek his extradition,” the Bahamas government said. in a report Monday evening.

Bankman-Fried’s arrest is the first step in a multi-step legal process to transfer the former crypto billionaire to the United States.

Prosecutors for the Southern District of New York said they would unseal the indictment against Bankman-Fried on Tuesday morning. The New York Times reported that the charges will include wire fraud, wire fraud conspiracy, securities fraud, securities fraud conspiracy and money laundering. The Securities and Exchanges Commission also said it would disclose the charges against the FTX CEO on Tuesday.

The United States and the Bahamas have had an extradition process in place since 1994, when a treaty signed by both countries entered into force. Extradition is a legal process in which one jurisdiction — in this case, the United States — asks another jurisdiction — in this case, the Bahamas — to surrender a person accused of a crime so that they can face to prosecution.

At this point, the United States has not made a formal extradition request to the Bahamas. Yet the extradition treaty allows the Bahamas to make a “provisional arrest” at the request of the United States before the formal extradition request is delivered. A detainee can be detained for a maximum of 60 days while the formal request is pending.

If the Bahamas agrees to extradite Bankman-Fried, the country would hand over the former CEO of FTX to the United States, along with any other important evidence gathered in the Bahamas. But the Caribbean country may decide to postpone Bankman-Fried’s transfer as it conducts its own investigation.

“While the United States individually pursues criminal charges against SBF, The Bahamas will pursue 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,” Philip Davies, Prime Minister of the Bahamas, said in A declaration In Monday.

The Bahamas’ acceptance of a US extradition request does not confer guilt. “If you’re right about the law, the procedure doesn’t really involve a trial on the facts. It’s no defense to extradition to say, ‘I’m innocent,'” Harry Sandick, associate of patterson Belknap Webb & Tyler LLP, said Initiated.

And extraditions are not always successful.

In 2013, the United States attempted to extradite National Security Agency whistleblower Edward Snowden from the semi-autonomous Chinese city of Hong Kong. The city government was reluctant to respond to the request, likely due to Snowden’s claims that the United States was spying on both mainland China and Hong Kong. The city finally allowed Snowden to leave town, claiming that the United States had submitted an erroneous request. (United States suspended his extradition agreement with Hong Kong in 2020 after Beijing imposed a national security law on the city).

Then, in 2018, Canadian authorities arrested Huawei chief financial officer Meng Wanzhou at the request of the United States, which hoped to extradite her to face charges of fraud and evading sanctions. Beijing quickly arrested two Canadians, Michael Kovrig and Michael Spavor, and tied their fate to the outcome of Meng’s extradition request. Meng’s extradition hearings began in January 2020 and lasted until September 2021, when the United States agreed to postpone Meng’s lawsuit, allowing Huawei’s CFO to leave Canada. Beijing released the “two Michaels” soon after.

The extradition of the CEO of FTX is unlikely to be so thorny. Bankman-Fried is due in court in Nassau, the capital of the Bahamas, on Tuesday, according to the New York Times.

But there is one scheduled event that Bankman-Fried may not attend again: his hearing before the U.S. House Financial Services Committee tomorrow, where he was to appear virtually.

Our new weekly newsletter Impact Report examines how ESG news and trends are shaping the roles and responsibilities of today’s leaders. Subscribe here.

Leave a Reply

Your email address will not be published. Required fields are marked *