Updated at 10:23 P.M. E.S.T.

The former chief executive of the failed cryptocurrency firm FTX, Sam Bankman-Fried, has been arrested in the Bahamas at the request of the United States, authorities say.

The arrest was made Monday after the United States filed criminal charges that are expected to be unsealed Tuesday, according to U.S. Attorney Damian Williams.

Mr. Bankman-Fried had been under criminal investigation by American and Bahamian authorities following the collapse last month of FTX. The firm filed for bankruptcy on November 11, when it ran out of money after the cryptocurrency equivalent of a bank run.

“We expect to move to unseal the indictment in the morning and will have more to say at that time,” Mr. Williams said.

The Bahamian Attorney General, Ryan Pinder, said the Bahamas would “promptly” extradite Mr. Bankman-Fried to the U.S. once the indictment is unsealed and U.S. authorities make a formal request.

FTX is headquartered in the Bahamas and, since its failure, Mr. Bankman-Fried has remained in his Bahamian luxury compound in Nassau.

A spokesman for Mr. Bankman-Fried had no comment Monday evening.

The arrest comes a day before Mr. Bankman-Fried was scheduled to testify before a Congressional committee Tuesday, his first appearance under oath since FTX filed for bankruptcy. The Hill reported he had been resisting a similar appearance before Senate lawmakers.

Mr. Bankman-Fried was scheduled to testify remotely during a hearing of the House Financial Services Committee, along with the company’s current CEO, John Ray III. Mr. Bankman-Fried has done several media interviews since his firm collapsed but has not publicly testified about what happened.

The collapse of crypto’s second-largest exchange has garnered worldwide attention, and Mr. Bankman-Fried has reportedly been under criminal investigation by American and Bahamian authorities.

The prospect of Mr. Bankman-Fried’s testimony before Congress drew comparison to his previous visits to the Capitol, when he testified in favor of certain bills that would regulate the crypto industry in ways that favored FTX.

He became prominent in Washington and donated millions of dollars toward mostly left-leaning political causes and Democrat political campaigns, and was hailed as the new face of the crypto industry.

A handful of members of the Financial Services Committee have previously taken political donations from FTX or Mr. Bankman-Fried, including Representatives Josh Gottheimer, a New Jersey Democrat, and Representative Ritchie Torres, a New York Democrat.

It wasn’t clear at first whether Mr. Bankman-Fried had voluntarily agreed to testify, or whether the committee had to subpoena him. Prior to his reported arrest he had, more or less, remained in his Bahamian luxury compound in Nassau, and temporarily out of reach of American authorities.

Representative Maxine Waters, a California Democrat and chairwoman of the committee, said Monday she was “disappointed” that the American public, and customers of FTX customers, would not get to see Mr. Bankman-Fried testify under oath.

The hearing will mark the first public appearance by Mr. Ray since FTX’s collapse as well. Before FTX, the restructuring expert was best known for having to clean up the mess at Enron roughly 20 years ago. 

Mr. Ray has said in court filings that the financial conditions at FTX were worse than at Enron, and that he has no confidence in FTX’s bookkeeping before he took over the firm.

“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,” Mr. Ray said in his prepared remarks for Tuesday’s hearing.

The Senate’s Banking Committee will hold a hearing of its own on FTX Thursday, “but Bankman-Fried suggested during a Monday livestream on Twitter that he was too busy to appear,” the Hill reported. That, however, was before his reported arrest.

Mr. Bankman-Fried said recently that he did not “knowingly” misuse customers’ funds, and said he believes his millions of angry customers will eventually be made whole.

With Associated Press