FTX founder Sam Bankman-Fried has been charged by U.S. authorities with conspiracy and fraud and ordered held in custody without bail by a judge in the case.
In all, Bankman-Fried has been charged with eight criminal counts and accused of deliberately misusing billions of dollars of customers’ funds prior to the FTX cryptocurrency exchange filing for bankruptcy on November 11.
U.S. prosecutors allege that Bankman-Fried conspired with others “to defraud customers of FTX.com by misappropriating those customers’ deposits and using those deposits to pay expenses and debts of Alameda Research.”
Bankman-Fried was arrested on December 12 at his home in the Bahamas just hours before he was scheduled to testify before the U.S. Congress about FTX’s collapse.
In a separate court filing, the U.S. Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) sued Bankman-Fried for his role in the $8 billion failure of FTX.
The judge in the case has ordered Bankman-Fried held in police custody until at least February 2023, and denied his request for bail, saying he poses a flight risk. Bankman-Fried is currently being held at a prison in Nassau, Bahamas.
Bankman-Fried has denied knowingly committing fraud or breaking the law. However, prosecutors claim Bankman-Fried provided false information to customers about Alameda Research and FTX’s finances.
Bankman-Fried can fight extradition from the Bahamas to the U.S. to formally face the charges against him or waive his right to an extradition hearing. Lawyers for Bankman-Fried said their client is prepared to return to the U.S. and defend himself in court.
