FTX CEO Sam Bankman-Fried charged with defrauding crypto investors of US$1.8 billion
- Sam Bankman-Fried has been under investigation by the Bahamas and the US following the collapse of his cryptocurrency firm FTX last month
- US Securities and Exchange Commission says the 30-year-old orchestrated scheme to ‘build house of cards on foundation of deception’
US prosecutors have charged Sam Bankman-Fried, the founder and former CEO of cryptocurrency exchange FTX, with a host of financial crimes and campaign finance violations on Tuesday, alleging he played a central role in the collapse of FTX and hid its problems from the public and investors.
Bankman-Fried was charged with eight counts, ranging from wire fraud to money laundering to conspiracy to commit fraud on the United States. He was also charged with violating campaign finance laws, a notable charge as Bankman-Fried, 30, was one of the largest political donors this year.
The charges are on top of charges announced earlier on Tuesday by the Securities and Exchange Commission, which alleged Bankman-Fried defrauded investors and used proceeds from investors to buy real estate on behalf of himself and family.
Bankman-Fried orchestrated a years-long fraud by diverting investors’ funds to his private hedge fund and using them to make venture investments, lavish real estate purchases and large political donations, the US Securities and Exchange Commission alleged.
Bankman-Fried was arrested on Monday in the Bahamas, where he has been living. He has the right to contest extradition, which could delay but probably not stop his transfer to the US.
He was under criminal investigation by US and Bahamian authorities following the collapse last month of FTX, which filed for bankruptcy on November 11, when it ran out of money after the cryptocurrency equivalent of a bank run.