Sam Bankman-Fried was set to appear in federal court in Manhattan on Thursday afternoon to face charges that he defrauded $1.8 billion from investors in his FTX cryptocurrency exchange.
The mother of the disgraced crypto king, Barbara Fried, was spotted arriving at the courthouse on Pearl Street hours before the planned midday arraignment.
Bankman-Fried, 30, was transported from the Bahamas to New York on Wednesday night after surrendering his right to a protracted extradition process. He is currently being held in federal jail.
While Bankman-Fried was being brought to the United States to face the accusations, Manhattan US Attorney Damian Williams said that two of his accomplices were also indicted in connection with the alleged fraud and had quietly pled guilty.
According to prosecutors, Gary Wang, 29, co-founder of FTX, and Carolyn Ellison, 28, former CEO of Alameda Research and ex-girlfriend of Bankman-Fried, admitted to wire fraud, securities fraud, and commodities fraud.
Bankman-Fried was detained in the Bahamas last week after the U.S. government revealed allegations against him in connection with a “vast, years-long fraud” that defrauded investors through “a house of cards” constructed on “a foundation of lies,” as stated by prosecutors.
Wednesday, Sam Bankman-Fried was led in handcuffs to a plane at Lynden Pindling international airport in Nassau, Bahamas, for his extradition to the United States.
He opted not to contest his extradition after his request to be released from the notorious Fox Hill Prison on the island nation for dietary reasons was granted.
Bankman-Fried is accused of playing a crucial part in the rapid collapse of the digital currency exchange last month and of illegally utilizing investor funds to purchase real estate, support his trading firm Alameda Research, and make political contributions.
He faces 115 years in prison on accusations of wire fraud, securities fraud, conspiracy, money laundering, and campaign finance offenses.
Following a claim that Alameda’s finances were concentrated in the token and used as collateral, investors liquidated FTX’s trademark token FFT en masse, precipitating FTX’s swift demise as one of the main crypto exchanges.
In a couple of days, its worth plummeted from $32 billion to approximately $1 billion, causing Bankman-Fried to leave as CEO while the company filed for bankruptcy.
An SEC complaint against him stated, “Bankman-Fried attracted more than $1.8 billion from investors” who believed “that FTX had proper controls and risk management measures.”
“Unbeknownst to those investors (and FTX’s trading customers), Bankman-Fried was conducting a vast, multi-year fraud, diverting billions of dollars of the trading platform’s customer cash for his own personal gain and to expand his crypto empire.”
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