On Tuesday, US prosecutors charged Sam Bankman-Fried, the founder and former CEO of crypto currency exchange FTX, with fraud and violating campaign finance laws by misappropriating cash from his clients, saying the investigation is ongoing and “moving very quickly.”
Bankman-Fried allegedly used “stolen customer money” to make unlawful campaign contributions to both Democrats and Republicans in New York, according to U.S. Attorney Damian Williams, calling this one of the “biggest financial frauds in American history.”
“While this is our first public announcement, it will not be our last,” he said, adding Bankman-Fried “made tens of millions of dollars in campaign contributions.”
Williams declined to comment on whether prosecutors would file charges against additional FTX officials, adding that the investigation was ongoing. Additionally, he stayed silent when asked if any insiders of FTX were assisting with the investigation.
Bankman-Fried appeared in court on Tuesday in the Bahamas, where FTX is headquartered and where he was arrested on Monday. When the 30-year-old showed up at the strongly guarded Bahamas court, he appeared at ease wearing a blue shirt. It was his first public appearance in person since the collapse of the Cryptocurrency exchange. He informed the court that he may contest his extradition to the US.
Bankman-legal Fried’s representative asked that his client be granted bail of $250,000. If Bankman-Fried resists extradition, Bahamian prosecutors have demanded that his request for bail be denied.
According to an earlier statement from his attorney, Mark S. Cohen, “Mr. Bankman-Fried is reviewing the charges with his legal team and considering all of his legal options.”
John Ray, the current CEO of FTX, testified before federal lawmakers on Tuesday that the company lost $8 billion in customer funds, saying the company showed “absolute concentration of control in the hands of a small group of grossly inexperienced, non-sophisticated individuals.”