Sam Bankman-Fried: Arrested crypto boss hugs mother and father as he’s denied bail over ‘one in every of greatest monetary frauds in US historical past’ | Science & Tech Information

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Former cryptocurrency change boss Sam Bankman-Fried hugged his mother and father after being denied bail on costs referring to “one in every of the largest monetary frauds in American historical past”.

The 30-year-old founding father of FTX, has been charged by the US Securities and Change Fee (SEC) with fraud and violating marketing campaign finance legal guidelines. He can also be being sued.

Following his arrest within the Bahamas, a decide denied him bail, saying he was a “nice” flight danger, and despatched him to a neighborhood correctional facility as an alternative.

Bankman-Fried will stay in custody within the Bahamas till at the very least 8 February.

The newest developments cap a surprising fall from grace in current weeks for the person referred to as SBF, who amassed a fortune valued over $20bn (£16.2bn) as he rode a cryptocurrency growth to construct FTX into one in every of the world’s largest exchanges earlier than it abruptly collapsed this yr.

Bankman-Fried has beforehand apologised to prospects and acknowledged oversight failings at FTX, however mentioned he doesn’t personally assume he has any legal legal responsibility.

Earlier on Tuesday, US Lawyer Damian Williams in New York alleged Bankman-Fried had made unlawful marketing campaign contributions to Democrats and Republicans with “stolen buyer cash,” labelling it a part of one in every of the “greatest monetary frauds in American historical past”.

Bankman-Fried faces a most sentence of 115 years in jail if convicted on all eight counts, prosecutors mentioned.

He was arrested at his residence in a gated group within the Bahamas capital, Nassau.

Within the indictment unsealed on Tuesday morning, US prosecutors claimed Bankman-Fried had engaged in a scheme to defraud FTX’s prospects by misappropriating their deposits to pay for bills and money owed and to make investments on behalf of his crypto hedge fund, Alameda Analysis LLC.

He additionally defrauded lenders to Alameda by offering false and deceptive info concerning the hedge fund’s situation, and sought to disguise the cash he had earned from committing wire fraud, it’s alleged.

Sam Bankman-Fried is escorted out of court in Nassau, Bahamas

Each the SEC and the Commodity Futures Buying and selling Fee (CFTC) alleged Mr Bankman-Fried dedicated fraud in lawsuits filed on Tuesday.

The CFTC sued him, Alameda and FTX, alleging fraud involving digital commodity belongings.

Since at the very least Could 2019, FTX raised greater than $1.8bn from fairness traders in a years-long “brazen, multi-year scheme” during which Bankman-Fried hid FTX was diverting buyer funds to Alameda Analysis, the SEC alleged.

Bankman-Fried, who based FTX in 2019, was an unconventional determine who sported wild hair, t-shirts and shorts on panel appearances with statesmen like former American President Invoice Clinton.

He turned one in every of the most important Democratic donors, contributing $5.2m (£4.2m) to President Joe Biden’s 2020 marketing campaign.

FTX founder Sam Bankman-Fried poses for a picture, in an unspecified location, in this undated handout picture, obtained by Reuters on July 5, 2022. FTX/Handout via REUTERS/File Photo

Forbes pegged his internet value a yr in the past at $26.5bn (£21.4bn).

FTX filed for chapter on 11 November, leaving an estimated a million prospects and different traders going through losses within the billions of {dollars}. SBF resigned as chief govt the identical day.

The collapse reverberated throughout the crypto world and despatched bitcoin and different digital belongings plummeting.

John Ray, Bankman-Fried’s successor as CEO, was referred to as to testify earlier than the Home Monetary Companies Committee within the US Congress on Tuesday.

A crypto change is a platform on which traders can commerce digital tokens reminiscent of bitcoin.

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