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

“S.B.F.’s arrest followed receipt of formal notification from the United States that it has filed criminal charges against S.B.F. and is likely to request his extradition,” the government of the Bahamas said in a statement Monday night.

Bankman-Fried’s arrest is the first step in a multistage legal process to transfer the onetime crypto billionaire to U.S. custody.

Prosecutors from the Southern District of New York said they would unseal the indictment against Bankman-Fried on 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 will unveil charges against the FTX CEO on Tuesday.

The U.S. and the Bahamas have had an extradition process in place since 1994, when a treaty signed by both countries came into force. Extradition is a legal process in which one jurisdiction—in this case, the U.S.—asks another jurisdiction—in this case, the Bahamas—to surrender someone accused of a crime so he or she can face prosecution.

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

If the Bahamas agrees to extradite Bankman-Fried, the country would surrender the former FTX CEO to the U.S., along with any other important evidence collected in the Bahamas. But the Caribbean country could decide to defer Bankman-Fried’s transfer as it conducts its own investigation. 

“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,” Philip Davies, the Bahamas’ prime minister, said in a statement on Monday. 

The Bahamas’ acceptance of a U.S. extradition request does not confer guilt. “If you’re right on the law, the proceeding doesn’t really involve a trial on the facts. It’s no defense to extradition to say, ‘I’m innocent,’” Harry Sandick, a partner at Patterson Belknap Webb & Tyler LLP, told Insider. 

And extraditions don’t always succeed.

In 2013, the U.S. tried to extradite National Security Agency whistleblower Edward Snowden from the semiautonomous Chinese city of Hong Kong. The city’s government dithered on fulfilling the request, likely because of Snowden’s claims that the U.S. was spying on both mainland China and Hong Kong. The city eventually allowed Snowden to leave the city, claiming the U.S. had submitted a faulty request. (The U.S. suspended its extradition agreement 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 U.S., which 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 started in January 2020 and lasted until September 2021, when the U.S. agreed to defer Meng’s prosecution, allowing the Huawei CFO to leave Canada. Beijing released the “two Michaels” soon after.

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

But there’s one scheduled event that Bankman-Fried may no longer be attending: his hearing in front of the U.S. House Financial Services Committee tomorrow, where he was set to appear virtually.