Criminal charges brought against the former boss of a failed cryptocurrency exchange
According to reports, Sam Bankman-Fried, founder of FTX, has agreed to be extradited from the US to face criminal prosecutions over the collapse and subsequent destruction of his cryptocurrency exchange.
On Wednesday, Mr Bankman-Fried will be heard. This will allow him to leave the Bahamas in order to face fraud charges in the US.
According to Bloomberg, Mr Bankman-Fried previously stated that he would fight extradition to a Bahamas court. However, he has signed the necessary paperwork in Nassau.
According to American authorities, the 30-year-old was accused of “one of the largest financial frauds in US History”.
The criminal charges against him could result in a combined sentence of 170 years imprisonment.
A judge in the Bahamas denied bail to Mr Bankman-Fried because he was considered a flight risk after he was arrested on December 12. If he is allowed to return to the US, he will be eligible to apply for bail.
He was taken into custody at Fox Hill Prison in the Bahamas after his arrest.
After a spike in withdrawals, the cryptocurrency exchange FTX crashed in November. This left around one million creditors without a job.
New York US prosecutors charged Mr Bankman-Fried with wire fraud, securities fraud and money laundering following the implosion.
Bahamas-based Alameda Research was accused of using customer funds to support risky cryptocurrency investments.
Gary Gensler (chairman of the Securities and Exchange Commission), which regulates the US stock exchange, claimed that Mr Bankman-Fried had taken “billions” of trading platform customers’ funds for his personal benefit and to grow his crypto empire.
Mr Gensler stated: “We allege Sam Bankman-Fried constructed a house of Cards on a foundation deceitful while telling investors it was one the most secure buildings in crypto.”
Mr Bankman-Fried denied any wrongdoing.
There is a possibility that around 80,000 British FTX users lost their money following the collapse of the company. This is because 8% of its users were located in the UK.
This comes as FTX’s new management tries to recoup millions in donations made to them by Mr Bankman Fried, including approximately $40m (PS33m), given to Democrat politicians in America.
