The federal authorities charged yesterday that Sam Bankman-Fried, the founder of the cryptocurrency exchange FTX, had engaged in widespread fraud and had used his customers’ deposits to finance his political activities, buy lavish real estate and invest in other companies.
In a 13-page criminal indictment, Bankman-Fried was charged with eight counts, including wire fraud against customers and lenders, as well as conspiracy to defraud the U.S. and violate campaign finance laws.
A civil complaint claimed that for three years, he misappropriated billions in customer deposits.In Washington, John Ray, the company’s new C.E.O., who took over when the firm filed for bankruptcy, testified in Congress, laying out the myriad management failures that had contributed to the exchange’s implosion.
In Nassau, the capital of the Bahamas, Bankman-Fried appeared in court for the first time. He was denied bail and will remain in custody.“Bankman-Fried was orchestrating a massive, yearslong fraud, diverting billions of dollars of the trading platform’s customer funds for his own personal benefit and to help grow his crypto empire,” the S.E.C. said.