The former CEO of failed crypto firm FTX Sam Bankman-Fried has been arrested in the Bahamas at the request of the U.S. government, the U.S. attorney’s office in New York said Monday.
"We expect to move to unseal the indictment [Tuesday] morning and will have more to say at that time,” U.S. Attorney Damian Williams said in a statement.
Bankman-Fried, who is under criminal investigation by U.S. and Bahamian authorities, was set to appear before the House Financial Services Committee on Tuesday to answer questions from lawmakers about the spectacular fall of his crypto empire last month.
Bankman-Fried previously missed the deadline for a hearing with the Senate Banking Committee that would have taken place on Wednesday, but he insisted that he would participate in the House hearing — just not in-person. The Bahamas resident said he will attend the hearing remotely due to the "Paparazzi effect" his presence would cause in the nation's capital.
Joining Bankman-Fried will be current FTX CEO and corporate turnaround expert John J. Ray III, who in a recent bankruptcy filing openly condemned the company's previous leadership.
According to prepared remarks already submitted to Congress, Ray will be no less sparing toward Bankman-Fried during the hearing: "Although our investigation is ongoing and detailed findings will have to await its conclusion, the FTX Group’s collapse appears to stem from the absolute concentration of control in the hands of a very small group of grossly inexperienced and unsophisticated individuals who failed to implement virtually any of the systems or controls that are necessary for a company that is entrusted with other people’s money or assets."
He will then go on to list in detail the FTX Group's "unacceptable management practices."
Bankman-Fried, meanwhile, is urging lawmakers to keep their expectations low.
"I still do not have access to much of my data — professional or personal," he tweeted. "So there is a limit to what I will be able to say, and I won't be as helpful as I'd like."
He expressed a similar sentiment during a Twitter Spaces interview, saying the hearing will be "frustrating and underwhelming in some ways, because I wasn’t gonna be able to answer questions that I would really want to be able to and — frankly — really should be able to.”
Committee members are likely to pepper the fallen founder with questions anyway — even though many representatives were the beneficiaries of Bankman-Fried's wide-ranging political donations.
For some background on FTX's fall, this congressional memorandum provides a good overview. Cheddar News also tracked the initial weeks of the collapse with this blow-by-blow timeline.
Updated with Associated Press write through.