Sam Bankman-Fried, the disgraced founder and former CEO of cryptocurrency exchange FTX, has been released on bail by a Bahamian judge.
A Bahamian judge on Tuesday denied SBF bail, hours after U.S. prosecutors accused the crypto boss of defrauding clients, embezzling billions of dollars and violating campaign laws in that which has been described as one of America’s biggest financial scams, according to a Reuters report.
SBF was sent to the only prison in the Bahamas, Fox Hill. According to human rights reports, the facility is overcrowded and in unsanitary conditions.
The Bahamian government arrested SBF on Monday after the United States officially announced that it had filed criminal charges against SBF and would likely seek his extradition.
The Southern District of New York, which is investigating Bankman-Fried and the collapse of FTX and its sister company Alameda, has charged SBF with eight counts, including wire fraud and conspiracy to misappropriate client funds. If convicted on all eight counts, he faces up to 115 years in prison, CNN reported.
Separately, the Securities and Exchange Commission (SEC) has filed charges against SBF for “orchestrating a scheme to defraud FTX stock investors.” SEC Chairman Gary Gensler said in a statement, “
“We allege that Sam Bankman-Fried built a house of cards based on deception while telling investors that it was one of the most secure buildings in cryptocurrency. The alleged fraud committed by Mr. Bankman-Fried is a clear call for crypto platforms to abide by our laws.”
In early November, FTX announced that it had filed for Chapter 11 bankruptcy in Delaware. Notably, FTX US was also included in the deal, despite the former CEO’s claim that the US stock market was doing well.
SBF, who recently invited the BBC to his Bahamas mansion, told media he hoped to start a new business and earn enough money to compensate victims of the collapse.
He also denied the allegations of fraud, saying: “I did not knowingly commit any fraud, I don’t think I committed any fraud, I didn’t want that to happen. I certainly wasn’t as competent as I thought. that would be the case.”
However, Gurbir Grewal, director of the SEC’s Division of Enforcement, said FTX’s promise of high levels of investor protection and detailed terms and conditions was “not just flimsy, it was fraudulent.”
New FTX CEO John Ray III also claimed that the SBF crypto empire had virtually no corporate control and a surprising lack of financial and other records, saying he had never seen such a thing. “complete failure” of his entire career “which saw corporate checks.