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Former FTX CEO Sam Bankman-Fried arrested in the Bahamas. What happens next?

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

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

Prosecutors in the Southern District of New York said they would disclose the charge against Bankman-Fried 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 Exchange Commission also said it would unveil the allegations against the FTX CEO on Tuesday.

The United States and the Bahamas have been in an extradition process since 1994, when a treaty signed by both countries has entered into force. Extradition is a legal process in which one jurisdiction, in this case the United States, requests another jurisdiction, in this case the Bahamas, to hand over someone accused of a crime so they can be prosecuted.

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

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

“As the United States individually pursues criminal charges against SBF, the Bahamas will continue its regulatory and criminal investigations into the collapse of FTX, with continued cooperation from law enforcement and regulatory partners in the United States and elsewhere,” Philip Davies, said declared the prime minister of the Bahamas a declaration on Monday.

The acceptance by the Bahamas of a US extradition request does not confer guilt. “If you’re right in law, the proceedings don’t really involve a trial on the facts. It is no defense against extradition to say, “I am innocent,” “Harry Sandick, a partner of Patterson Belknap Webb & Tyler LLP, said Insiders.

And extraditions don’t always succeed.

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 hesitated to comply with the request, likely due to Snowden’s claims that the United States was spying on both mainland China and Hong Kong. The city possibly permitted Snowden to leave town, claiming that the United States made an incorrect request. (The United States suspended his extradition deal with Hong Kong in 2020 after Beijing imposed a national security law on the city).

Then, in 2018, Canadian authorities arrested Huawei CFO Meng Wanzhou at the request of the United States, who hoped to extradite her to face charges of fraud and sanctions evasion. Beijing soon arrested two Canadians, Michael Kovrig and Michael Spavor, and tied 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 U.S. agreed to postpone Meng’s indictment, which allowed Huawei’s CFO to leave Canada. Beijing released the “two Michaels” shortly thereafter.

The extradition of the FTX CEO is unlikely to be as thorny. Bankman-Fried is expected to appear Tuesday before the Magistrate Court in Nassau, the capital of the Bahamas, according to the New York Times.

But there is one event scheduled that Bankman-Fried may no longer be present at: his hearing tomorrow before the US House Financial Services Committee, where he was supposed to appear virtually.