FTX Founder to Face Criminal Charges in US

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Sam Bankman-Fried, the founder of cryp­tocur­ren­cy exchange FTX, has agreed to be extra­dit­ed to the Unit­ed States to face crim­i­nal charges relat­ed to the col­lapse of the exchange, accord­ing to his lawyer. The deci­sion comes just a week after Bankman-Fried’s lawyers ini­tial­ly said they planned to fight extra­di­tion. U.S. pros­e­cu­tors allege that Bankman-Fried played a cen­tral role in the rapid col­lapse of FTX and hid its prob­lems from the pub­lic and investors. The Secu­ri­ties and Exchange Com­mis­sion (SEC) also accused Bankman-Fried of ille­gal­ly using investors’ mon­ey to buy real estate on behalf of him­self and his fam­i­ly. If con­vict­ed, the 30-year-old could poten­tial­ly spend the rest of his life in jail.

FTX Founder Arrest

Bankman-Fried was arrest­ed in the Bahamas last week at the request of the U.S. gov­ern­ment. He arrived at the cour­t­house for his hear­ing on Mon­day in a Cor­rec­tions van, which was escort­ed by a SWAT vehi­cle and a police vehi­cle. A hand­ful of peo­ple who iden­ti­fied them­selves as either cryp­tocur­ren­cy enthu­si­asts or FTX cus­tomers came to the cour­t­house to wit­ness the pro­ceed­ings. Ben Arm­strong, the founder of the Bit­Boy Cryp­to web­site, said that he had come to the cour­t­house with a dozen peo­ple, some of whom had lost mon­ey with FTX.

If extra­dit­ed to New York, Bankman-Fried will like­ly be held in a fed­er­al deten­tion cen­ter in Brook­lyn, where famous pris­on­ers in recent years have includ­ed R. Kel­ly, Mar­tin Shkrel­li, and Ghis­laine Maxwell. Lawyers for Maxwell, who was con­vict­ed of help­ing mil­lion­aire Jef­frey Epstein sex­u­al­ly abuse chil­dren, have repeat­ed­ly com­plained to a judge about the unsan­i­tary and inhu­mane con­di­tions at the deten­tion cen­ter. Bankman-Fried’s attor­ney may request that he be released on bail once he is back in the U.S., although a sep­a­rate judge in the Bahamas denied his request for bail last week on the grounds that he was a flight risk.

Before the bank­rupt­cy of FTX, Bankman-Fried was con­sid­ered by many in Wash­ing­ton and on Wall Street as a wun­derkind of dig­i­tal cur­ren­cies, some­one who could help take them main­stream by work­ing with pol­i­cy­mak­ers to bring more over­sight and trust to the indus­try. Bankman-Fried was worth tens of bil­lions of dol­lars, at least on paper, and was able to attract celebri­ties like Tom Brady and for­mer politi­cians like Tony Blair and Bill Clin­ton to his con­fer­ences and events. How­ev­er, his fall from grace was swift, and he has now become a pari­ah in the industry.

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