The disgraced of the failed cryptocurrency exchange FTX – Sam Bankman-Fried – has agreed to be extradited to the US to face fraud charges
Authorities in the US has accused the 30-year-old, who lives in the Bahamas, has been accused of committing “one of the biggest financial frauds in US history”.
He will face charges in New York, which involves allegations of stealing billions from FTX customers to plug losses at Alameda Research, his hedge fund, before the exchange abruptly collapsed in November.
FTX has filed for bankruptcy, leaving many people unable to withdraw funds, as a court filing says FTX owed its 50 largest creditors almost $3.1 billion.
It was not immediately clear when Bankman-Fried would depart the Bahamas, where he was arrested on Dec 12 per a US extradition request. No further court date was set at the conclusion of Monday’s hearing.
Last week, Damian Williams, the US Attorney for the Southern District of New York, said Bankman-Fried was accused one of the largest frauds in US history.
The FTX founder was also accused of using tens of millions in ill-gotten gains for illegal campaign contributions to Democrats and Republicans alike, Williams said.
Similarly, the Securities and Exchange Commission said the man who was formerly nicknamed the “King of Crypto” had built a “house of cards on a foundation of deception”.
Bankman-Fried’s abrupt decision came after a tumultuous appearance on Monday morning at a court in the Bahamas capital Nassau.
The 30-year-old crypto mogul rode a boom in the value of bitcoin and other digital assets to become a billionaire several times over and an influential political donor in the United States, until FTX collapsed in early November after a wave of withdrawals. The exchange declared bankruptcy on Nov. 11.
Bankman-Fried has acknowledged risk-management failures at FTX but said he does not believe he has criminal liability.
Cryptocurrencies are not traditional currencies, but are stored online and act more like investment vehicles or securities – often with a high degree of volatility.
FTX had an estimated 1.2 million registered users who were 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 $15 billion.
A day after his arrest on Dec 12, Bankman-Fried was taken to a Bahamas correctional facility. A 2021 US State Department report of the facility said detainees faced rodents and a lack of toilets, though local authorities said conditions have since improved. At his Dec. 13 hearing, he referred to the night of his arrest as “hectic”.
The FTX exchange allowed customers to trade normal money for cryptocurrencies such as Bitcoin.