Former cryptocurrency exchange boss Sam Bankman-Fried hugged his parents after he was denied bail on charges involving “one of the largest financial frauds in U.S. history.”
The 30-year-old FTX founder was charged with fraud and campaign finance violations by the U.S. Securities and Exchange Commission (SEC). He is also being prosecuted.
The following he was arrested in the bahamasA judge refused his bail, saying he was a “substantial” flight risk and sent him to a local correctional facility.
Bankman-Fried will be in custody in the Bahamas until at least February 8.
The man known as SBF has fallen from grace with alarming speed in recent weeks, with recent developments ending his amassing a fortune worth more than $20bn (£16.2bn) amid the cryptocurrency boom to build Soar It became one of the largest exchanges in the world before its sudden collapse this year.
Bankman-Fried has previously apologized to clients and acknowledged FTX’s oversight lapses, but said he personally does not believe he bears any criminal responsibility.
Earlier Tuesday, U.S. Attorney Damian Williams in New York charged Bankman-Fried with making illegal campaign contributions to Democrats and Republicans by “stealing client funds,” calling it the “largest financial fraud in U.S. history.” one.
If convicted on all eight counts, Bankman-Fried faces up to 115 years in prison, prosecutors said.
He was arrested at his home in a gated community in Nassau, the capital of the Bahamas.
inside The indictment was unsealed Tuesday morningU.S. prosecutors allege Bankman-Fried participated in a scheme to defraud FTX clients, embezzle their deposits to pay fees and debts, and invest on behalf of his crypto hedge fund, Alameda Research LLC.
He also allegedly defrauded Alameda’s lenders by providing false and misleading information about the hedge fund’s status and attempted to disguise funds he had earned through wire fraud.
Both the SEC and the Commodity Futures Trading Commission (CFTC) charged Mr. Bankman-Fried with fraud in a lawsuit filed Tuesday.
The CFTC sued him, Alameda, and FTX alleging fraud involving digital commodity assets.
Beginning at least May 2019, FTX raised more than $1.8 billion from equity investors in a years-long “brazen multi-year plan,” in which Bankman-Fried concealed that FTX would send clients to the SEC, the SEC alleges. Funds transferred to Alameda Research.
Bankman-Fried, who founded FTX in 2019, is an unusual figure, sporting wild hair, T-shirts and shorts at symposiums with politicians such as former U.S. President Bill Clinton.
He became one of the biggest Democratic donors, contributing $5.2m (£4.2m) to President Joe Biden’s 2020 campaign.
A year ago, Forbes pegged his net worth at $26.5bn (£21.4bn).
FTX files for bankruptcy On November 11, an estimated 1 million customers and other investors faced billions of dollars in losses. On the same day, SBF resigned as CEO.
The crash reverberated throughout the crypto world, sending Bitcoin and other digital assets plummeting.
Bankman-Fried’s successor, John Ray, testified before the US House Financial Services Committee on Tuesday.
A cryptocurrency exchange is a platform where investors can trade digital tokens such as Bitcoin.