Nassau, Bahamas/New York, Dec 13 (Reuters/GNA) – A Bahamian judge denied FTX founder Sam Bankman-Fried bail on Tuesday, hours after U.S. prosecutors accused the 30-year-old of misappropriating billions of dollars and violating campaign laws in what has been described as one of America’s biggest financial frauds.
The former CEO of the collapsed cryptocurrency exchange, dressed in a blue suit without a tie, lowered his head and hugged his parents after the judge said his risk of flight was too “great” and ordered that he be sent to a Bahamas correctional facility until Feb. 8.
The day’s events capped a stunning fall from grace in recent weeks for Bankman-Fried, who amassed a fortune valued over $20 billion as he rode a cryptocurrency boom to build FTX into one of the world’s largest exchanges before it abruptly collapsed this year.
In an indictment unsealed on Tuesday morning, U.S. prosecutors said Bankman-Fried had engaged in a scheme to defraud FTX’s customers by misappropriating their deposits to pay for expenses and debts and to make investments on behalf of his crypto hedge fund, Alameda Research LLC.
He also defrauded lenders to Alameda by providing false and misleading information about the hedge fund’s condition, and sought to disguise the money he had earned from committing wire fraud, prosecutors said.
They accused Bankman-Fried of using the stolen money to make “tens of millions of dollars in campaign contributions.”
U.S. Attorney Damian Williams in New York said that the investigation was “ongoing” and “moving quickly.”
“While this is our first public announcement, it will not be our last,” he said.
Williams described the collapse as one of the “biggest financial frauds in American history.”
GNA
Credit: Reuters