FTX founder Sam Bankman-Fried arrested in Bahamas for fraud
FTX founder Sam Bankman-Fried has been arrested for fraud in the Bahamas with a judge denying his bail. US prosecutors allege he committed fraud and violated campaign finance laws. His bail was denied based because he is considered a “great” flight risk. A judge ordered him to be sent to the Bahamas’ department of corrections until February 8, 2023.
Bankman-Fried is accused of making illegal campaign contributions to Democrats and Republicans with “stolen customer money” in what is considered to be one of the “biggest financial frauds in American history.” US attorney Damian Williams says the FTX founder made tens of millions of dollars in campaign contributions. According to Al Jazeera, he is reportedly facing a maximum sentence of 115 years in prison if convicted on all eight counts.
Williams did not say whether other FTX execs or insiders were being charged and declined to say whether they were cooperating with the ongoing investigation. The US Securities and Exchange Commission and the Commodity Futures Trading Commission also are accusing Bankman-Fried of fraud in lawsuits filed yesterday.
Bankman-Fried founded FTX in 2019, building it into one of the world’s largest digital currency exchange platforms. Since then, FTX raised more than US$1.8 billion from equity investors. But, the SEC alleges Bankman-Fried concealed the fact that FTX was diverting customer funds to its affiliated crypto hedge fund. Forbes calculated his net worth at US$26.5 billion just a year ago.
But, his wave of success came crashing down as FTC collapsed and filed for bankruptcy on November 11, leaving around one million customers and investors facing billions of dollars in losses. The collapse was one of a series of bankruptcies this year in the crypto world with its demise sending Bitcoin and other digital assets into the ground.
