CRYPTO tycoon Sam Bankman-Fried is a former American entrepreneur and investor – and the man at the heart of the FTX meltdown.
From his arrest to the collapse of his £27billion empire, here’s everything you need to know.
Why did Sam Bankman-Fried go to jail over the FTX collapse?
On December 12, 2022, Sam Bankman-Fried was arrested in the Bahamas after the United States Department of Justice filed criminal charges against him.
The disgraced FTX tycoon was also denied bail.
His arrest came a day before he was due to appear at a House hearing on the cryptocurrency exchange collapse.
Bankman-Fried has been accused of defrauding investors out of $1.8 billion after convincing them his trading platform FTX was safe to use.
According to the SEC complaint filed on Tuesday, the entrepreneur, who ran his business with ex-girlfriend Caroline Ellison, diverted client funds to Alameda Research — his private crypto fund.
SEC Chairman Gary Gensler said, “We contend that Sam Bankman-Fried built a house of cards on a foundation of deception while telling investors it was one of the most secure buildings in crypto.
“Mr. Bankman-Fried’s alleged fraud is a wake-up call to crypto platforms that they must comply with our laws.”
The SEC said investigations “are ongoing regarding other securities violations and other organizations and individuals related to the alleged wrongdoing.”
Bankman-Fried reportedly complied with the police in the arrest.
He now faces extradition to the United States.
What criminal charges have been brought against Sam Bankman-Fried?
At a news conference earlier this week, the US Attorney for the Southern District of New York said Bankman-Fried faces eight criminal charges in total.
This includes fraudulent FTX clients, FTX investors and lenders from sister company Alameda Research.
Hours earlier, the Securities and Exchange Commission announced civil charges against Bankman-Fried after accusing him of defrauding investors.
Why did the FTX collapse?
The charges follow the collapse of FTX in November 2033, when Bankman-Fried resigned and the cryptocurrency exchange declared bankruptcy.
FTX is said to have secretly transferred up to £8.3 billion in customer funds to Alameda to fund risky cryptocurrency trades before the collapse and that between $1 billion and $2 billion of that money has disappeared.
After that, many customers withdrew their money from FTX and the company went bankrupt.
Rival cryptocurrency exchange Binance then withdrew from its bailout deal.
Bankman-Fried tweeted taking responsibility for the collapse of his cryptocurrency exchange.
The former FTX CEO wrote: “I’m sorry. That’s the biggest thing. I messed up and should have done better.”
He explained that he should have “communicated more”.
All of his employees also publicly resigned, releasing a statement that said, “You have fundamental questions about the legitimacy and integrity of the operations that have funded the FTX Foundation and Future Fund.”
https://www.the-sun.com/news/6679591/sam-bankman-fried-jail-ftx/ Is Sam Bankman-Fried In Jail Over FTX Collapse?