FTX founder Sam Bankman-Fried arrested in Bahamas

The U.S. Securities and Exchange Commission on Tuesday charged Sam Bankman-Fried, the embattled former CEO of cryptocurrency giant FTX and trading firm Alameda Research, with defrauding investors.

"FTX’s collapse highlights the very real risks that unregistered crypto asset trading platforms can pose for investors and customers alike," said Gurbir S. Grewal, director of the SEC’s Division of Enforcement, in a statement.

Bankman-Fried had been arrested Monday in the Bahamas after federal prosecutors in New York filed criminal charges contained in a sealed indictment, according to the Royal Bahamas Police Force.

Damian Williams, U.S. attorney for the Southern District of New York, said on Monday that specific charges were expected to be unsealed Tuesday.

In a statement, Williams said: "Earlier this evening, Bahamian authorities arrested Samuel Bankman-Fried at the request of the U.S. government, based on a sealed indictment filed by the United States Attorney’s Office for the Southern District of New York. We expect to move to unseal the indictment in the morning and will have more to say at that time."

A source familiar with the charges told ABC News that Bankman-Fried is facing a multi-count fraud indictment that comes one month after FTX filed a $32 billion bankruptcy.

The arrest "followed receipt of formal notification from the United States that it has filed criminal charges against SBF and is likely to request his extradition," the Bahamas Attorney General's Office said.

Bankman-Fried is due to appear in a courtroom in Nassau, Bahamas, Tuesday morning before his eventual transfer to New York for prosecution. The exact timing of his extradition was not clear Monday night. He was also due to appear before Congress on Tuesday.

Since the collapse of FTX, federal prosecutors in the Southern District of New York have been looking at Bankman-Fried, sources have told ABC News.

The Southern District declined to comment on the arrest.

The SEC said on Monday it had "authorized separate charges relating to his violations of securities laws, to be filed publicly tomorrow in SDNY."

In response to the arrest announcement, Bahamas Prime Minister Philip Davis said, “The Bahamas and the United States have a shared interest in holding accountable all individuals associated with FTX who may have betrayed the public trust and broken the law."

"While the United States is pursuing criminal charges against SBF individually, the Bahamas will continue 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," he added.

FTX, once a crypto darling, filed for bankruptcy protection in November after a rival cryptocurrency exchange announced it was backing out of a plan to acquire it.

Bankman-Fried had been scheduled to appear before Congress Tuesday to testify before the House Financial Services Committee in a hearing titled "Investigating the Collapse of FTX, Part 1." Rep. Maxine Waters, chairwoman of the committee, said in a statement Monday night that she was "surprised" to hear of the arrest.

"While I am disappointed that we will not be able to hear from Mr. Bankman-Fried tomorrow, we remain committed to getting to the bottom of what happened, and the committee looks forward to beginning our investigation by hearing from Mr. John Ray III tomorrow," she added.

John Ray, FTX's new CEO guiding the company through bankruptcy proceedings, is still expected to testify.

Bankman-Fried, in a series of tweets, had said he's "willing to testify" after initially resisting the committee's request.

"I still do not have access to much of my data -- professional or personal. So there is a limit to what I will be able to say, and I won't be as helpful as I'd like," Bankman-Fried wrote. "But as the committee still thinks it would be useful, I am willing to testify on the 13th."

Bankman-Fried, in an interview with ABC News' George Stephanopoulos, denied that he knew "that there was any improper use of customer funds."

ABC News' Jasper Williams, Alexandra Hutzler, Kirit Radia, Mark Guarino and Rebecca Jarvis contributed to this report.