Bill Ackman was guest host of CNBC's Squawk Box this morning, and following a question about what happens next with Herbalife, Ackman said: "I believe the government will start arresting people."

Ackman is famously short Herbalife, announcing his position in an enormous 342-slide presentation in December 2012.

Ackman also said that his bet against Herbalife is now mostly in the form of put options, or contracts to sell shares of the company at a future date, rather than simply holding shares of the company short.

Ackman said his bet against Herbalife is notionally larger than it was when he first initiated his short on the company, and if the company went out of business today, Ackman would make about $2 billion.

In March, the FTC launched a formal investigation into the company, which Ackman called a "pyramid scheme" in his presentation.

Following disclosure of the investigation, shares of Herbalife fell below $50, but have subsequently risen to more than $60, a move Ackman attributed mostly to the company buying back stock.