Bitcoin, a type of cryptocurrency Illustration: VCG

Disgraced cryptocurrency tycoon Sam Bankman-Fried was arrested on Monday in the Bahamas at the request of the United States, according to US officials seeking to charge him after the spectacular collapse of his FTX platform.

The arrest comes on the eve of Bankman-Fried's scheduled appearance at a US Congress hearing in which he was to testify under oath about the crypto exchange's overnight demise.

The 30-year-old had in recent weeks defied legal advice and multiplied media appearances offering his version of his company's sudden failure, usually by video link from the Bahamas where his company is headquartered.

"Earlier this evening, Bahamian authorities arrested Samuel Bankman-Fried at the request of the US Government, based on a sealed indictment filed by the southern district of New York," said a tweeted statement from Damian Williams, lead prosecutor for the district.

"We expect to move to unseal the indictment in the morning and will have more to say at that time," he added.

According to a press release from the attorney general's office in the Bahamas, Bankman-Fried was to be held in custody before an expected request for his extradition by the US.

The Bahamas prime minister's office shared a police statement saying Bankman-Fried was arrested in the early evening at his apartment complex in Nassau.

As much as anyone, Bankman-Fried had embodied the apparent emergence of cryptocurrency as an above-board investment and no longer a frowned on get-rich-quick scheme shunned by the banking establishment.

His FTX platform was plugged by celebrities in advertising campaigns.

But after reaching a valuation of $32 billion, FTX's implosion was swift following a November 2 report on ties between FTX and Alameda, a trading company also controlled by Bankman-Fried.

The report exposed that Alameda's balance sheet was heavily built on the FTT currency, a token created by FTX and with no independent value.

Among the revelations, FTX is suspected of fraud for propping up Alameda with billions of dollars in customer funds that are now likely lost forever.

FTX CEO John Ray was to tell Congress on Tuesday that the problems arose because control was "in the hands of a very small group of grossly inexperienced and unsophisticated individuals."

"Never in my career have I seen such an utter failure of corporate controls at every level of an organization, from the lack of financial statements to a complete failure of any internal controls or governance whatsoever," Ray said in prepared remarks.

AFP