Sam Bankman-Fried: Arrested crypto boss hugs parents as he’s denied bail for ‘one of the biggest financial scams in US history’ | Science and technology news

Former cryptocurrency exchange boss Sam Bankman-Fried hugged his parents after he was denied bail for “one of the largest financial frauds in American history.”

The 30-year-old FTX founder has been charged by the US Securities and Exchange Commission with fraud and violating campaign finance laws. He too is being sued.

Following his arrest in the Bahamasa judge denied him bail, saying he was a “great” escape risk and instead sent him to a local correctional facility.

Bankman-Fried will remain in custody in the Bahamas until at least February 8.

The latest developments cap a stunning fall from grace in recent weeks for the man known as SBF, who has a fortune worth over £20 billion FTX one of the largest stock exchanges in the world before abruptly collapsing this year.

Bankman-Fried has previously apologized to clients and acknowledged oversight failures at FTX, but said he personally does not believe he is criminally responsible.

US Attorney Damian Williams said in New York on Tuesday that Bankman-Fried had used “stolen customer money” to make illegal campaign contributions to Democrats and Republicans, describing it as part of one of the “largest financial frauds in American history”.

Bankman-Fried faces a maximum sentence of 115 years in prison if convicted on all eight counts, prosecutors said.

He was arrested at his home in a gated community in Nassau, the capital of the Bahamas.

In which Charges unsealed Tuesday morningU.S. prosecutors alleged that Bankman-Fried engaged in a scheme to defraud FTX’s clients by using their deposits to pay expenses and debts and to make investments on behalf of his crypto hedge fund Alameda Research LLC.

He also defrauded Alameda lenders by providing false and misleading information about the condition of the hedge fund and attempted to disguise the money he reportedly made from wire fraud.

Both the SEC and the Commodity Futures Trading Commission (CFTC) accused Mr. Bankman-Fried of fraud in lawsuits filed Tuesday.

The CFTC sued him, Alameda and FTX for alleged fraud related to digital commodity investments.

As of at least May 2019, FTX has raised more than $1.8 billion from equity investors in a year-long “brazen, multi-year scheme” in which Bankman-Fried hid FTX diverting customer funds to Alameda Research, the SEC claimed.

Bankman-Fried, who founded FTX in 2019, was an unconventional figure who wore wild hair, T-shirts and shorts to panel appearances with statesmen like former US President Bill Clinton.

He became one of Democrats’ biggest donors, contributing $5.2 million (£4.2 million) to President Joe Biden’s 2020 campaign.

Forbes put his net worth at $26.5 billion (£21.4 billion) a year ago.

FTX has filed for bankruptcy on November 11, leaving an estimated one million customers and other investors with billions of dollars in losses. SBF resigned as CEO on the same day.

The collapse resonated throughout the crypto world, sending Bitcoin and other digital assets crashing.

John Ray, Bankman-Fried’s successor as CEO, was summoned before the House Financial Services Committee of the US Congress on Tuesday.

A crypto exchange is a platform where investors can trade digital tokens like bitcoin.