Ex-FTX CEO Sam Bankman-Fried Arrested in Bahamas: What’s Next?

“SBF’s arrest follows receipt of formal notification from the United States that it has filed criminal charges against SBF and will likely seek his extradition,” the Bahamas government said in a statement Monday night.

Bankman-Fried’s arrest is the first step in a multi-stage court process to bring the one-time crypto billionaire into U.S. custody.

Prosecutors for the Southern District of New York said they would unseal the indictment against Bankman-Fried Tuesday morning. That 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 announce the indictment against the FTX CEO on Tuesday.

The US and the Bahamas have had extradition proceedings since 1994, when a treaty signed by both countries came into effect. Extradition is a legal process by which one jurisdiction – in this case the US – requests another jurisdiction – in this case the Bahamas – to extradite someone accused of a crime so that he or she may be prosecuted.

So far, the United States has not made a formal extradition request to the Bahamas. However, the extradition treaty allows the Bahamas, at US insistence, to make a “preliminary arrest” before the formal extradition request is served. A detainee can be held for a maximum of 60 days while the formal application is pending.

If the Bahamas agrees to Bankman-Fried’s extradition, the country would hand over the former FTX CEO to the US, along with all other key evidence collected in the Bahamas. However, the Caribbean country may decide to delay Bankman-Fried’s transfer as it conducts its own investigation.

“While the United States pursues criminal charges against SBF individually, the Bahamas will continue its own regulatory and criminal investigation into the collapse of FTX, with the continued cooperation of its law enforcement and regulatory partners in the United States and elsewhere,” Philip Davies said, the Prime Minister of the Bahamas in a statement on Monday.

The Bahamas’ acceptance of a US extradition request does not create guilt. “If you are legally right, the proceeding is not really a hearing of the facts. There is no defense against extradition to say, ‘I am innocent,'” said Harry Sandick, a partner at Patterson Belknap Webb & Tyler LLP Insider.

And deliveries are not always successful.

In 2013, the US attempted to extradite National Security Agency whistleblower Edward Snowden from the semi-autonomous Chinese city of Hong Kong. The city government was reluctant to comply with the request, likely due to Snowden’s claims that the US was spying on both mainland China and Hong Kong. The city eventually allowed Snowden to leave the city, claiming that the U.S. had made an erroneous application. (The US suspended its extradition deal with Hong Kong in 2020 after Beijing imposed a national security law on the city).

Then, in 2018, Canadian authorities arrested Meng Wanzhou, Huawei’s CFO, at the request of the US, who hoped to extradite her to face charges of fraud and sanctions evasion. Beijing soon arrested two Canadians, Michael Kovrig and Michael Spavor, linking their fates to the outcome of Meng’s extradition request. Meng’s extradition hearings began in January 2020 and lasted until September 2021, when the US agreed to stay the prosecution against Meng and allow Huawei’s CFO to leave Canada. Beijing released the “two Michaels” shortly thereafter.

The delivery of the FTX CEO should not be quite as delicate. Bankman-Fried is scheduled to appear in Magistrates Court in Nassau, the capital of the Bahamas, on Tuesday New York Times.

But there is one scheduled event Bankman-Fried may not be attending: his hearing before the US House Financial Services Committee tomorrow, where he was due to appear virtually.

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