Sam Bankman-Fried denied bail in ‘one of the biggest financial frauds’

Sam Bankman-Fried, the founder of FTX was denied bail on charges relating to “one of the biggest financial frauds in American history”, a news report has stated. The 30-year-old former cryptocurrency exchange boss has been charged by the US Securities and Exchange Commission (SEC) with fraud and violating campaign finance laws.

He is also being sued.

On Monday, he was arrested in the Bahamas, however Mr. Bankman-Fried has indicated that he will fight extradition to the US.

Bahamas Chief Magistrate JoyAnn Ferguson-Pratt denied the petition for his release on bail, citing a “great” risk of flight, and ordered that he be kept on remand at a correctional facility until February 8.

Last month, FTX filed for bankruptcy in the US, leaving many users unable to withdraw their funds. According to a court filing, FTX owed its 50 largest creditors almost $3.1 billion (£2.5 billion).

Among the most serious allegations against Mr. Bankman-Fried is that he used billions of dollars of customer funds to prop up his investment trading company, Alameda.

It is unclear how many people who have funds in the exchange will get back at the end of bankruptcy proceedings – although many experts have warned it may be a small fraction of what they deposited.

Mr Bankman-Fried faces eight criminal charges in the US, including wire fraud, money laundering and conspiracy to defraud. He also faces civil charges including misleading investors who put more than $1 billion (£8099 million) into the company.

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Earlier on Tuesday, US Attorney Damian Williams in New York alleged Mr Bankman-Fried had made illegal campaign contributions to Democrats and Republicans with “stolen customer money,” labeling it part of one of the “biggest financial frauds in American history”.

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

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