Sam Bankman-Fried, the ex-boss of FTX, charged with fraud by the American justice
Sam Bankman-Fried is one of the star players in the cryptocurrency scene. His fortune was recently estimated at $17 billion.
Sam Bankman-Fried, ex-rising star of cryptocurrencies with his platform FTX and his company Alameda, was indicted on Tuesday by American justice for having defrauded his customers and investors.
Arrested Monday in the Bahamas, where he resides, at the request of the United States, the thirties was presented Tuesday to a magistrate of the archipelago, who decided to keep him in detention.
Dressed in a blue suit and without handcuffs, he made it known during the hearing, in a court in Nassau, that he could oppose his extradition to the States States, local media reported.
Sam Bankman-Fried is being prosecuted on eight counts, including electronic fraud, money laundering and violation of election laws, according to the unveiled indictment by the New York Federal Prosecutor.
Mr. Bankman-Fried is accused of having, from the beginning of FTX in 2019, used the money deposited by customers wishing to speculate on cryptocurrencies to finance the activity – and the risky bets – of his brokerage and investment company Alameda.
He is also accused of having lied about the real financial health of the company to investors who lent money in Alameda.
He also allegedly used money stolen from his clients to pay tens of millions of dollars to politicians, both Democrats and Republicans. He would have tried to buy influence in Washington, accused the federal prosecutor of New York, Damian Williams, during a press conference.
The stock market policeman accuses him of having lied to investors about the links between his two companies and of having used his clients' money to make risky investments, lavish real estate purchases and large political donations .
The Derivatives Agency (CFTC) accuses him of fraud and misrepresentation.
Mr. Bankman-Fried is reviewing the charges with his legal team and exploring all of his legal options, his U.S. attorney, Mark Cohen, said in a statement.
The platform was yet valued at $32 billion at the start of the year. The man known as SBF had recruited many celebrities to promote it and met regularly with regulators in Washington.
But in early November, doubts began to surface about FTX's ties to Alameda, and many customers sought their money back. Unable to meet their demands, the group filed for bankruptcy on November 11.
FTX's collapse tripped up several companies in the industry cryptocurrencies and prompted many officials to call for increased regulation.
The White House spokeswoman said Tuesday that Joe Biden's administration supports legislative efforts to enact cryptocurrency legislation to better protect American consumers.
Sam Bankman-Fried, CEO of FTX, testifies during a hearing before the House of Representatives Financial Services Committee at the Rayburn House Office Building, NY Capitol on December 8, 2021 in Washington, DC.
In the United States, if he is convicted of fraud, he could spend the rest of his life in prison, given the amount, estimates Jacob Frenkel, of the law firm Dickinson Wright.
There wouldn't be an indictment if prosecutors weren't absolutely confident they're going to get a conviction, added the federal investigations specialist, who has worked for the US Stock Constable (SEC).
A graduate of the Massachusetts Institute of Technology, the son of law professors at Stanford University, Mr. Bankman-Fried had managed to legitimize cryptocurrencies with the general public and the political class. His fortune was once estimated at $25 billion.
He was still supposed to speak before a House of Representatives parliamentary committee on Tuesday, after John Ray, the new boss of FTX.
The former leaders of the platform have shown complete failure at all levels of control, the latter told Congress. He particularly deplored the total absence of accounting or an independent board of directors, for a company that was brewing billions of dollars.
At first glance, the x27;collapse of the FTX group appears to be the result of the absolute concentration of control in the hands of a very small group of grossly inexperienced and unsophisticated individuals, the official believed.