Sam Bankman-Fried is denied bail for ‘the worst financial swindle in US history’

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By Creative Media News

If convicted, the 30-year-old FTX founder faces up to 115 years in prison for an alleged “brazen, multi-year” massive financial fraud.

Sam Bankman-Fried embraced his parents after he was denied bail on accusations related to “one of the largest financial scams in U.S. history.”

The US Securities and Exchange Commission (SEC) has charged the 30-year-old founder of FTX with fraud and violation of campaign finance regulations. He is being sued as well.

After his arrest in the Bahamas, a judge denied him bail, citing his “significant” flight risk, and transferred him to a local detention center.

Sam bankman-fried is denied bail for 'the worst financial swindle in us history'
Sam bankman-fried is denied bail for 'the worst financial swindle in us history'

Bankman-Fried will stay in Bahamian custody until at least February 8th.

The latest discoveries culminate a dramatic fall from grace for the guy known as SBF, who acquired a fortune worth more than $20bn (£16.2bn) as he rode a cryptocurrency boom to turn FTX into one of the world’s largest exchanges before it abruptly failed this year.

Bankman-Fried has apologized to clients and admitted supervisory deficiencies at FTX, but he has stated that he does not believe he has criminal accountability.

US Attorney Damian Williams in New York charged earlier on Tuesday that Bankman-Fried made illegal campaign payments to Democrats and Republicans using “stolen consumer money” as part of one of the “worst financial frauds in American history.”

Prosecutors said Bankman-Fried faces a maximum of 115 years in jail if convicted on all eight counts.

Sam bankman fried
Sam bankman-fried is denied bail for 'the worst financial swindle in us history'

He was detained at his residence in a gated enclave in Nassau, the capital of the Bahamas.

US authorities alleged in an indictment unsealed Tuesday morning that Bankman-Fried engaged in a scheme to defraud FTX’s customers by misappropriating their deposits to cover bills and debts and to make investments for his crypto hedge fund, Alameda Research LLC.

Allegedly, he also misled lenders to Alameda by providing false and deceptive information regarding the hedge fund’s state, and he attempted to conceal the money he obtained through wire fraud.

In complaints filed on Tuesday, the SEC and the Commodity Futures Trading Commission (CFTC) accused Mr. Bankman-Fried committed fraud.

The CFTC filed a lawsuit against him, Alameda, and FTX, alleging digital commodities asset fraud.

The SEC said that since at least May 2019, FTX obtained over $1.8 billion from equity investors in a “brazen, multi-year scam” in which Bankman-Fried disguised FTX’s diversion of client monies to Alameda Research.

Bankman-Fried, who formed FTX in 2019, was a nonconformist who wore unkempt hair, t-shirts, and shorts during panel appearances with prominent politicians such as former U.S. President Bill Clinton.

He became one of the greatest Democratic donors by providing $5.2 million (£4.2 million) to the 2020 campaign of President Joe Biden.

A year earlier, Forbes estimated his net worth to be $26.5bn (£21.4bn).

On November 11, FTX filed for bankruptcy, leaving a million consumers and other investors facing losses in the billions of dollars. The same day, SBF resigned as chief executive officer.

Bitcoin and other digital assets plummeted after the fall echoed throughout the crypto world.

John Ray, the successor to Bankman-CEO Fried’s position, was summoned to testify before the House Financial Services Committee on Tuesday.

On a cryptocurrency exchange, investors can trade digital tokens such as bitcoin.

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