FTX founder Sam Bankman-Fried to face fraud charges after extradition, two ex-associates charged

Thursday - 22/12/2022 06:35 Author: Editors Desk Source: USA Today
The Bahamian Office of Attorney General Ryan Pinder said Bankman-Fried would depart for the U.S. Wednesday night.

Sam Bankman-Fried, founder of the failed cryptocurrency exchange FTX, is being extradited to the U.S. to face federal fraud charges related to the misappropriation of billions of dollars of customer funds, Bahamian officials said Wednesday.

The 30-year-old one-time mogul had been held in the Bahamas following his arrest earlier this month, but abruptly dropped a challenge to be transferred to the custody of U.S. authorities where he is to face prosecution in New York.

The Bahamian Office of Attorney General Ryan Pinder said Bankman-Fried would depart for the U.S. Wednesday night.
 

 

Bankman-Fried was in FBI custody Wednesday night and is scheduled to appear in Manhattan federal court for arraignment "as soon as possible," Damian Williams, the U.S. Attorney for the Southern District of New York, said in a Twitter post.

Two former business associates of Bankman-Fried, Caroline Ellison and Gary Wang, have pleaded guilty to federal charges and agreed to cooperate with prosecutors investigating the alleged fraud scheme, Williams said. He did not specify the allegations. 

Like Bankman-Fried, Ellison and Wang have also been accused of civil charges by the U.S. Securities and Exchange Commission and the Commodity Futures Trading Commission.

Before the spectacular financial collapse, Bankman-Fried was the face of FTX, a global company with more than 130 affiliates that allowed individual investors to trade cryptocurrencies, growing to be the third-largest exchange by volume. The company's commercials featured prominent celebrities, and its logo appeared on an NBA stadium and on MLB umpire uniforms.

Political contributions:Sam Bankman-Fried's political donations totaled millions. FTX could sue to recover them.

Bankman-Fried is accused of using billions of dollars of FTX funds to make personal investments and millions of dollars in contributions to political campaigns while repaying billions in loans owed by Alameda Research, a cryptocurrency hedge fund that he also founded, according to court documents.
 

U.S. Attorney Damian Williams speaks during a press conference about the criminal charges filed against FTX founder Sam Bankman-Fried, Tuesday, Dec. 13, 2022, in New York.
U.S. Attorney Damian Williams speaks during a press conference about the criminal charges filed against FTX founder Sam Bankman-Fried, Tuesday, Dec. 13, 2022, in New York.


The California man is charged with two counts of wire fraud conspiracy, two separate counts of wire fraud, and one count of conspiracy to commit money laundering.

Each of the charges carry maximum punishments of 20 years in prison.

Bankman-Fried also is charged with conspiracy to commit commodities fraud, conspiracy to commit securities fraud, and conspiracy to defraud the United States and commit campaign finance violations, each of which carries a maximum sentence of five years.

According to the SEC court complaint, Ellison the former chief executive of Alameda Research, furthered the alleged fraud scheme by following Bankman-Fried's instructions to manipulate the price of FTT, an FTX-issued crypto security token.

Wang, an FTX co-founder and former chief technology officer, created FTX’s software code that allowed Alameda to divert FTX customer funds, and enabled Ellison to misappropriate FTX customer funds for Alameda’s trading activity, the SEC court complaint alleged. 

5 Things Podcast:FTX founder Sam Bankman-Fried arrested, breakthrough in nuclear fusion
 

FTX founder Sam Bankman-Fried is led away handcuffed by officers of the Royal Bahamas Police Force in Nassau, Bahamas on Dec. 13, 2022. The disgraced cryptocurrency tycoon was hit with multiple criminal charges and is accused of committing one of the biggest financial frauds in US history.
FTX founder Sam Bankman-Fried is led away handcuffed by officers of the Royal Bahamas Police Force in Nassau, Bahamas on Dec. 13, 2022. The disgraced cryptocurrency tycoon was hit with multiple criminal charges and is accused of committing one of the biggest financial frauds in US history.

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