Sam Bankman-Fried, the disgraced founder of collapsed cryptocurrency exchange FTX, was charged Tuesday with defrauding customers out of around $1.8 billion.
The 30-year-old alleged mini Madoff, who was arrested Monday in the Bahamas, is accused of orchestrating a years-long fraud scheme. The charges against him are laid out in an unsealed eight-count indictment in Manhattan federal court.
The Justice Department said that from 2019 through last month, Bankman-Fried “engaged in a scheme to defraud customers of FTX.com by misappropriating” his patrons’ deposits and using their money to pay the debts of Alameda Research, a crypto hedge fund he co-founded.
An addition, a lawsuit filed by the U.S. Securities and Exchange Commission on Tuesday accused Bankman-Fried of placing billions of dollars of FTX customer funds into Alameda, which he used as his “personal piggy bank to buy luxury condominiums, support political campaigns, and make private investments, among other uses,” the SEC said.
Bankman-Fried conducted “a massive, years-long fraud, diverting billions of dollars of the trading platform’s customer funds for his own personal benefit and to help grow his crypto empire,” reads a section of the complaint.
He is charged with conspiracy to commit wire fraud on customers, wire fraud on customers, conspiracy to commit wire fraud on lenders, wire fraud on lenders, conspiracy to commit commodities fraud, conspiracy to commit securities fraud, conspiracy to commit money laundering, and conspiracy to defraud the United States and violate campaign finance laws. The charges carry significant prison time.
It was unclear when the cryptocurrency world’s golden boy, who founded FTX when he was 27, was expected to be extradited to New York.
This is a developing story. Please check back for updates.
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