Sam Bankman-Fried arrived in New York on Wednesday to answer the eight criminal fraud charges levelled against him by the US Department of Justice.
The 30-year-old Sam Bankman-Fried was extradited from the Bahamas on the speculation of committing “one of the biggest financial frauds in US history,” US authorities have said. There have been several attempts to get Sam Banknman-Fried, but all have been futile as the former FTX owner proved hard to find.
Apprehended in the Bahamas some days back, many crypto hopefuls have expressed their earnest desire— to see Sam get locked in jail for the ruckus he provoked in the cryptocurrency market. FTX’s bankruptcy furthered the market’s devastating meltdown. Sam Bankman-Fried, who has denied the allegations thrown at him, is set to appear in court on Thursday.
More details about Sam Bankman-Fried’s arrest
Two of his former associates have pleaded guilty to related charges. FTX co-founder Gary Wang and Caroline Ellison, former head of cryptocurrency trading firm Alameda Research, were both charged with “roles in the frauds that contributed to FTX’s collapse,” Damian Williams, attorney for the Southern District of New York, announced. They are cooperating with the Southern District of New York. He said in a video as court documents were released.
A lawyer for Mr Wang said his client had accepted responsibility for his actions and took his obligations as a cooperating witness seriously. “Samuel Bankman-Fried is now in FBI custody and is on his way back to the United States,” Mr Williams said. “He will be transported directly to the Southern District of New York and appear in court before a judge in this district as soon as possible.” “If you participated in misconduct at FTX or Alameda, now is the time to get ahead of it,” he added. “We are moving quickly, and our patience is not eternal.”
Ms. Ellison and Mr. Wang face separate charges from the US Securities and Exchange Commission (SEC). Last week, Sam Bankman-Fried was also charged with “orchestrating a scheme to defraud equity investors in FTX”. The SEC said the man formerly nicknamed the “King Of Crypto” had built a “house of cards on a foundation of deception.”
“As alleged, Mr. Bankman-Fried, Ms. Ellison, and Mr. Wang were active participants in a scheme to conceal material information from FTX investors, including through the efforts of Mr. Bankman-Fried and Ms. Ellison to artificially prop up the value of FTX, which served as collateral for undisclosed loans that Alameda took out from FTX pursuant to its undisclosed, and virtually unlimited, line of credit,” according to Sanjay Wadhwa, deputy director of the SEC’s Division of Enforcement.
“By surreptitiously siphoning FTX’s customer funds onto the books of Alameda, defendants hid the very real risks that FTX’s investors and customers faced.” FTX has filed for bankruptcy, leaving many people unable to withdraw funds. According to a court filing, FTX owed its 50 largest creditors almost $3.1bn (£2.5bn).
Among the most serious allegations against Mr. Bankman-Fried is that he used billions of dollars of customer funds to prop up Alameda.
Mr. Williams claimed last week that Mr. Bankman-Fried was charged with one of the worst frauds in US history.
According to Mr. Williams, the FTX founder was also accused of utilizing “tens of millions” in illegally obtained money to contribute to Democratic and Republican candidates. However, Mr. Bankman-Fried has tried to disassociate himself from claims of criminal conduct. Before his arrest, he stated in an interview with BBC News: “I didn’t purposefully engage in fraud. I don’t believe I defrauded anyone. All of this was something I wanted to avoid. Definitely not as proficient as I had believed I was.”
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