Disgraced FTX fraudster Sam Bankman-Fried arrived in New York on Wednesday night after being extradited from the Bahamas over one of the biggest financial frauds in US history.
Bankman-Fried is currently in the FBI custody and will be prosecuted in the Southern District of New York. He faces multiple fraud and other criminal charges over the collapse of the cryptocurrency exchange he founded and the sudden disappearance of billions of dollars in customer assets.
In another setback to the fallen tycoon, his close associates pleaded guilty in the hopes of getting lenient sentences. FTX co-founder Gary Wang and SBF's alleged girlfriend Caroline Ellison were charged with "roles in the frauds that contributed to FTX's collapse, according to US attorneys. Ellison was the former head of cryptocurrency trading firm Alameda Research, into which SBF allegedly funneled the customer assets before the exchange crashed.
"Samuel Bankman-Fried is now in FBI custody and is on his way back to the United States ... 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," said Damian Williams, attorney for the Southern District of New York, according to the BBC.
The charges SBF faces include: Conspiracy to commit wire fraud, committing wire fraud, conspiracy to commit commodities fraud, conspiracy to commit securities fraud and conspiracy to commit money laundering. He has also been charged with conspiracy to defraud the Federal Election Commission and carry out election campaign finance violations.
The US had demanded the extradition of SBF after the massive scale of the fraud came to light. the crypto con artist had initially reported to be contesting the extradition but changed his mind later on. The 30-year-old's extradition was finally ordered by a Bahamas judge.
According to the US Department of Justice, Bankman-Fried also faces charges over the use of FTX funds for his personal use to make investments and millions of dollars of political contributions to federal political candidates and committees and to repay billions of dollars in loans owed by Alameda Research.
"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 FTT, which served as collateral for undisclosed loans that Alameda took out from FTX pursuant to its undisclosed, and virtually unlimited, line of credit," the US Securities and Exchange Commission's Enforcement Division said.
"By surreptitiously siphoning FTX's customer funds onto the books of Alameda, defendants hid the very real risks that FTX's investors and customers faced," the statement added.
Massive Fraud Exposed
It was reported in early November that at least $1 billion of customer funds had vanished from collapsed crypto exchange FTX. The exchange's founder Sam Bankman-Fried secretly transferred $10 billion of customer funds from FTX to Bankman-Fried's trading company Alameda Research, a Reuters report had said citing people who are familiar with the investigation. A large portion of that total has since disappeared, they said. One source put the missing amount at about $1.7 billion. The other said the gap was between $1 billion and $2 billion.