Navinder Singh Sarao, who operated out of a house in west London, faces extradition to stand trial in Illinois on charges of wire fraud, commodities fraud, commodities manipulation, and "spoofing - bidding or offering with the intent to cancel before execution.

Saro also faces a civil enforcement action from the Commodity Futures Trading Commission, alleging price manipulation and spoofing, and estimating that the trader has made more than $40 million from his scam since 2010.

According to the criminal complaint, Saro used an automated trading program to manipulate the market for E-Mini S&P 500 futures contracts on the CME. This alleged manipulation earned him significant profits and contributed to a major drop in the US stock market on May 6, 2010, that came to be known as the "flash crash."

The 37 year old is accused of using a "dynamic layering" scheme, to affect the price of E-Minis, placing multiple, simultaneous, large-volume sell orders at different price points to create the appearance of substantial supply in the market.

When prices fell as a result of his activity, Sarao allegedly sold futures contracts only to buy them back at a lower price. Conversely, when the market moved back upward as activity ceased, he allegedly bought contracts only to sell them at a higher price.

The flash crash, threw a spotlight on the world of high-frequency trading and prompted regulators, led by the SEC, to bring in new measures such as circuit breakers designed to prevent huge movements of stock prices in an era of super-fast trading.

After an extensive investigation, the SEC and CFTC blamed the event on a trade from a brokerage called Waddell & Reed, a conclusion thrown into doubt by Saro's arrest. The CFTC's Aitan Goelman now says that the initial investigation was "based on the best information at the time".