New York prosecutors on Tuesday filed multiple criminal charges of “widespread fraud” once morest the former CEO of cryptocurrency exchange FTX, Sam Bankman-Fried, following his company’s sudden collapse.
The indictment came following Bankman-Fried appeared in a court in the Bahamas, where he indicated that he would fight Washington’s request to extradite him to the United States, requesting that he be released on bail pending his hearing.
In a courtroom in Nassau attended by US embassy officials and relatives of Panchmann-Fried, the Bahamas prosecutor stressed that the suspect should not be released on bail pending an extradition hearing for fear he would flee the country, according to the New York Times.
The criminal charges filed by New York prosecutors pose the biggest threat to Bankman-Fried, who faces the threat of a long prison sentence given the multibillion-dollar case.
“Bankman-Fred is reviewing the charges with his legal team and is considering all of his legal options,” a statement from his attorney, Mark Cohen, said.
According to the indictment of the US Public Prosecution Office, Bankman-Fred has been involved in money laundering, breaching campaign finance laws, and practicing electronic fraud since he founded his company in 2019.
The US Attorney General indicated that Bankman-Fred “has been running a major fraud operation for years during which he diverted billions of dollars from the funds of the clients of the trading platform for his personal benefit and to contribute to the growth of his cryptocurrency empire.”
For a month, Bankman-Fred has not stopped participating in media interviews from the Bahamas, despite the risk of being prosecuted for financial fraud following his company, whose value at the beginning of the year was $ 32 billion, went bankrupt overnight.
In early December, Bankman-Fried said he refused his lawyer’s advice to remain silent now, stressing that “it is my duty to explain what happened.”
On November 11, FTX filed for bankruptcy while facing a major cash shortage and a flood of withdrawals from panicked clients.
At the time, FTX took regarding $10 billion in client funds without permission, according to the Wall Street Journal.
Much of the attention focused on the relationship between FTX and its trading subsidiary, Alameda Research.
According to US media, Bankman-Fred’s fortune, which amounted to regarding $16 billion, evaporated within a few days.