What just happened? Investors taken to the cleaners by Sam Bankman-Fried’s FTX exchange will probably be pleased to hear that the man who admittedly made a lot of “mistakes” that cost them their money is in police custody today on fraud and money laundering charges. He was arrested last night in his Bahamian headquarters at the request of US officials.

Sam Bankman-Fried was scheduled to testify before Congress today, but he won’t make that appointment. Bahamian police arrested the former cryptocurrency magnate on Monday night at the request of US authorities. Bankman-Fried will remain in custody in the Bahamas as he awaits extradition to the United States.

“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,” said Bahamian officials.

The New York Times reports that prosecutors confirmed that they had pressed charges against SBF in a sealed indictment to be opened later today. An anonymous source says the offenses include wire fraud, wire fraud conspiracy, securities fraud, securities fraud conspiracy, and money laundering. The Securities and Exchange Commission said it will formally announce separate charges related to securities violations later today.

The source says that SBF is the only suspect listed in the indictment. However, criminal conspiracy, by definition, always involves more than one person. Therefore we can expect more arrests if the insider’s information is accurate.

Bankman-Fried’s fall from grace comes after a series of events that unfolded in a matter of days. The billionaire’s crypto exchange, FTX, began floundering due to — as SBF has put it — “bad decisions.” He had bailed out other crypto businesses and sunk a ton of money into advertising his FT Token (FTT). It got to the point where FTX needed a bailout.

Binance offered to buy FTX, but before the deal could be made formal, the Federal Trade Commission opened an investigation into the exchange for potentially mishandling investors’ deposits. The news caused FTT investors to panic resulting in a “bank run” that revealed an $8 billion deficit in FTT funds owed to investors.

The total valuation of FTX virtual evaporated overnight. Investors were angry, and the US government wanted answers. Congress subpoenaed SBF to appear and testify about the collapse. His testimony was scheduled for today, Tuesday, December 13. However, on Monday, someone leaked a private group message thread between SBF, Binance CEO Changpeng Zhao, Kraken exchange founder Jesse Powell, and Tether CTO Paolo Ardoino.

The most newsworthy part of the conversation involved a heated argument between SBF and Changpeng Zhao (aka CZ) that saw the Binance chief accuse the FTX founder of market manipulation. Bankman-Fried flatly denied the allegation.

“I have made a number of mistakes over the past year but this is not one of them,” SBF said in the conversation conducted via the encrypted messaging app Signal.

Zhao also accused him of trying to “depeg” Tether and of making wreckless crypto trades in the wake of the FTX implosion that threatened to send the entire crypto industry into a “meltdown,” according to the Times.

It is unclear if the revelation of this discussion was a catalyst for SBF’s subsequent arrest, but the timing is about right. The SEC and prosecutors could have seen Bankman-Fried as a flight risk and issued the arrest warrant before he could traipse off to parts unknown where extradition would have been a problem.

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