Following a chaotic court appearance in the Bahamas, FTX CEO and founder Sam Bankman-Fried is to be extradited to the US.
FTX CEO To Be Extradited
A week after the crypto wunderkind was arrested in his Bahamas apartment complex, the 30-year-old disgraced CEO has accepted to stand trial in New York.
According to the New York Times, Bankman-Fried was charged with wire fraud, wire fraud conspiracy, money laundering, securities fraud, securities fraud conspiracy, and election finance violations.
A defense lawyer for the FTX CEO, Jerone Roberts, told The New York Times that they are preparing the necessary documents for his extradition. Roberts noted:
Mr Bankman-Fried wishes to put the customers right, and that is what has driven his decision.
Bankman-Fried appeared in court a week after his lawyers had initially said they were going to fight extradition. The Bahamian authorities scheduled an extradition hearing for February 8. This new development may speed up his extradition to the US.
Once back in the US, the FTX CEO can request that he be released on bail. Last week, a separate judge denied Bankman-Fried bail based because he was a flight risk.
FTX owes its 50 largest creditors about $3.1 billion. However, it’s not clear when the extradition will occur.
The former billionaire has been accused of using billions of customer funds to set up his investment trading company, Alameda. He has also been accused of using ill-gotten gains to make illegal campaign contributions for both the Republican and Democratic parties in the US.
House Of Cards
FTX rose quickly in the crypto space to become a leading player in the industry. Sam Bankman-Fried’s popularity and crypto stardom propped him up as the golden child. He appeared on the covers of finance and tech magazines. And his company drew in the most prominent VC funds and managers.
But in a dramatic turn of events, FTX imploded almost overnight when Alameda Research went bankrupt.
FTT trades at $0.9 on daily chart. Source: FTTBUSD TradingView
A November 2 report that Alameda’s balance sheet was heavily overexposed to FTT currency (FTX’s native token with no inherent value) exposed Bankman-Fried’s gimmick.
Records show that FTX had an estimated 1.2 million registered users. Many have had their lives thrown into disarray following the crash. They wonder if they will ever get their cash trapped in their FTX digital wallets back.
BitBoy crypto website founder Ben Armstrong was in court with a dozen people who had lost their money to FTX. He said: “We want him to feel the weight of what he’s done.”
The Securities and Exchange Commission (SEC) said the man who was formerly nicknamed the “King of Crypto” had built a “house of cards on a foundation of deception.”
US prosecutors said SBF was charged in the US on eight counts, including conspiracy, wire fraud, money laundering, and election finance violations. The prosecutors noted that the FTX CEO,
Was orchestrating a massive, years-long fraud, diverting billions of dollars of the trading platform’s customer funds for his own personal benefit and to help grow his crypto empire.
Despite legal counsel, Bankman-Fried continued to appear in the media. He provided his version of events, painting himself as an oblivious CEO caught in a bad situation. He told the BBC, “I didn’t knowingly commit fraud.” SBF told the interviewer he didn’t want any of this to happen and added that he was “not nearly as competent” as he believed himself to be.
Featured image from GMA Network, chart from TradingView.com