NASSAU, Bahamas, The former chief executive officer of the collapsed cryptocurrency exchange FTX, Sam Bankman-Fried, has been extradited to the United States to face fraud charges.
The 30-year-old former billionaire, arrested in Nassau in mid-December, faces arrest warrants in the Southern District of New York. He was deported on suspicion of committing “one of the biggest financial frauds in US history,” US authorities have said.
Officers of the Financial Crimes Investigation Unit had arrested Bankman-Fried at his apartment complex in Albany on various financial offenses against the laws of the United States, which are also offenses against the laws of The Bahamas.
Bankman-Fried, who denies the allegations, may appear in court on Thursday. 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.
“Samuel Bankman-Fried is now in FBI custody and is on his way back to the United States,” Williams said, adding, “he will be transported directly to the Southern District of New York, and he will 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. We are moving quickly, and our patience is not eternal,” he added.
FTX, registered in Nassau as FTX Digital Markets Ltd., moved its headquarters from Hong Kong last year. FTX filed for bankruptcy in the US, leaving many users unable to withdraw their funds. According to a court filing, FTX owed its 50 largest creditors almost US$ 3.1 billion.
Last week, 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 under 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 real risks that FTX’s investors and customers faced.”
FTX had an estimated 1.2 million registered users using the exchange, but many have been left wondering if they will ever get back their cash trapped in FTX’s digital wallets.
Bankman-Fried was once viewed as a young version of legendary US investor Warren Buffett and, as recently as late October, had a net worth estimated at more than US$15 billion.
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