In this May 24 photo, former Malaysian prime minister Najib Razak speaks as he leaves the Malaysian Anti-Corruption Commission Office in Kuala Lumpur. Police have also seized jewelry and valuables valued at more than 1.1 billion ringgit ($272 million) from properties linked to Najib.
Najib and 1MDB have denied any wrongdoing.
This story is developing.
Founded by Najib in 2009, 1MDB is being investigated in at least six countries for alleged money laundering and graft.
In a pre-recorded video message released on his Twitter and Facebook page several hours after his arrest on Tuesday (Jul 3), Najib reminded Malaysians that none of the investigations into the accusations directed at him and his family have proven conclusive so far.
He and his luxury-loving wife Rosmah Mansor were questioned by investigators, as were his stepson Riza Aziz - whose firm produced the hit 2013 movie The Wolf Of Wall Street - and his former deputy Zahid Hamidi.
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Local media reports said some of the accounts belonged to Najib's political party, the once-powerful United Malays National Organisation (UMNO).
Najib was arrested by Malaysian anti-corruption agents and Malaysian authorities said he will be charged in court on Wednesday.
Najib's arrest was in relation SRC International, a former 1MDB unit, a task force investigating the fund said.
The settlement that Riza's Red Granite Pictures reached addressed one among two dozen forfeiture lawsuits filed by the US against $1.7 billion of assets that were allegedly acquired through money diverted from 1MDB. In the USA, his production company had reached a $60 million settlement in a suit that alleged the movie was funded by money siphoned from 1MDB.
A 1MDB taskforce set up by the government this week said 408 bank accounts involving funds of almost 1.1 billion ringgit had been frozen.
USA investigators say Riza's company, Red Granite Pictures Inc., used money stolen from 1MDB to finance Hollywood films including the Martin Scorsese-directed "The Wolf of Wall Street".