Sam Bankman-Fried, the founder and former head of collapsed cryptocurrency exchange FTX, has been arrested in the capital of the Bahamas, Nassau, at the request of the US government.
He is scheduled to appear on 13 December in a magistrates' court in the Caribbean country's capital.
Police said Mr Bankman-Fried, 30, was arrested for "financial offences" against laws in the US and The Bahamas.
In a statement from the Attorney General of The Bahamas Ryan Pinder KC said "on 12 December 2022, the Office of the Attorney General of The Bahamas announced the arrest by The Royal Bahamas Police Force of Sam Bankman-Fried (SBF), former CEO of FTX".
SBF's 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, it said.
"As a result of the notification received and the material provided therewith, it was deemed appropriate for the Attorney General to seek SBF's arrest and hold him in custody pursuant to our nation's Extradition Act.
"At such time as a formal request for extradition is made, The Bahamas intends to process it promptly, pursuant to Bahamian law and its treaty obligations with the United States."
The Bahamas Prime minister Davis said in the statement: "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."
"We commend our law enforcement partners for working to secure the arrest of Mr Sam Bankman-Fried in the Bahamas on federal criminal charges," US Securities and Exchange Commission (SEC) official Gurbir Grewal said in a statement.
"The Securities and Exchange Commission has separately authorised charges relating to Mr. Bankman-Fried's violations of our securities laws, which will be filed publicly tomorrow in the Southern District of New York," he added.
He will now be unable to testify at the US Congress today, according to Congresswoman Maxine Waters, who said in a statement that she was surprised to hear that he had been arrested.
"I am surprised to hear that Sam Bankman-Fried was arrested in the Bahamas at the direction of the United States Attorney for the Southern District of New York. It's about time the process to bring Mr. Bankman-Fried to justice has begun. However, as the public knows, my staff and I have been working diligently for the past month to secure Mr. Bankman-Fried's testimony before our Committee tomorrow morning. We received confirmation this afternoon from Mr. Bankman-Fried and his lawyers that he was still planning to appear before the Committee tomorrow, but then he was arrested.
"Although Mr. Bankman-Fried must be held accountable, the American public deserves to hear directly from Mr. Bankman-Fried about the actions that've harmed over one million people, and wiped out the hard-earned life savings of so many. The public has been waiting eagerly to get these answers under oath before Congress, and the timing of this arrest denies the public this opportunity. 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."
Last month FTX filed for bankruptcy in the US, leaving many users unable to withdraw their funds.
According to a court filing last month, FTX owed its 50 largest creditors almost $3.1bn.
Bankman-Fried was once viewed as a young version of legendary US investor Warren Buffett, and as recently as late October had a net worth estimated at more than $15bn.
