FTX collapse: Founder Sam Bankman-Fried arrested and charged with defrauding crypto investors

euronews.com:

US prosecutors have charged Sam Bankman-Fried, the founder of cryptocurrency exchange FTX, with a host of financial crimes and campaign finance violations, alleging he played a central role in the rapid collapse of FTX and hid its problems from the public and investors.

The indictment says that, starting in 2019, Bankman-Fried intentionally devised “a scheme and artifice to defraud” FTX's customers and investors, diverting their money to pay expenses and debts at his crypto hedge fund, Alameda Research, and to make lavish real estate purchases and large political donations.

Bankman-Fried was arrested on Monday in the Bahamas, which said it would “promptly” extradite him to the US once a formal request is made.

The US government charged him with eight criminal violations, ranging from wire fraud to money laundering, conspiracy to commit fraud, and making illegal campaign contributions.

A lawyer for Bankman-Fried, Mark S. Cohen, said on Tuesday he is “reviewing the charges with his legal team and considering all of his legal options".

The indictment comes on top of civil charges announced earlier in the day by the Securities and Exchange Commission (SEC). It also alleged that Bankman-Fried defrauded investors and illegally used their money to buy real estate on behalf of himself and family.

The charges mark a stunning fall from grace for the 30-year-old entrepreneur widely known by his initials SBF, who rode a boom in Bitcoin and other digital assets until FTX's collapse last month.

The exchange, launched in 2019 and based in the Bahamas, filed for bankruptcy on November 11 when it ran out of money after the cryptocurrency equivalent of a bank run. 

Since FTX collapsed, Bankman-Fried has been holed up in his Bahamian luxury