Founder and former head of cryptocurrency exchange platform FTX Sam Bankman-Fried began his journey to New York on Wednesday evening, where he is due to appear before a judge in the next few hours, the Manhattan federal prosecutor announced.
The magistrate also revealed that two key figures in the case had been indicted. The latter have pleaded guilty and are cooperating with the government, which means they could indict Sam Bankman-Fried.
“Sam Bankman-Fried is under FBI authority and on his way to the United States,” Damian Williams said in a video posted on Twitter.
“He will be taken directly to the Southern District of (State of) New York,” a jurisdiction that includes Manhattan, “and will be brought before a judge as soon as possible,” the federal prosecutor announced.
On Wednesday, Sam Bankman-Fried agreed to be extradited to the United States during a hearing in Nassau, the capital of the Bahamas.
At the hearing, he expressed his “desire to ensure affected customers get their money back,” according to the Wall Street Journal.
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Manhattan’s federal prosecutor also announced Wednesday that Caroline Ellison, the former head of Alameda Research, and Gary Wang, co-founder of FTX, have been charged “in connection with their roles in the fraud that contributed to the collapse of FTX,” without giving more details.
When asked by AFP about the allegations, the federal attorney’s office in Manhattan did not respond.
According to the Wall Street Journal, both have been charged with fraud, while only Caroline Ellison has been charged with conspiracy.
Alameda Research is the company that Sam Bankman-Fried allegedly used to carry out risky transactions with billions of dollars of funds deposited by customers on the FTX platform, without their knowledge.
Since FTX’s November 11 bankruptcy, Sam Bankman-Fried has repeatedly publicly claimed that he has not been at the helm of Alameda Research for several months, indirectly incriminating Caroline Ellison.
An argument disputed by the prosecution, which argues that “SBF” remained the primary decision maker within Alameda until FTX filed for bankruptcy.
Once the New York magistrate serves him of the charges against him, the former darling of the cryptocurrency world is expected to be placed in pretrial detention in New York, pending trial.
Until last year, defendants on remand in federal court in Manhattan were housed at the Metropolitan Correctional Center (MCC), located on the southern tip of the island.
But the site shut down in 2021, officially temporarily. He had been the subject of repeated complaints of unsanitary conditions of detention.
His reputation had also been tarnished by the suicide, in August 2019, in an MCC cell, of Jeffrey Epstein, accused of having created and maintained a pedophile ring.
Sam Bankman-Fried could then be sent to the Metropolitan Detention Center (MDC) in Brooklyn, which has also been criticized for understaffing and questionable inmate management.
Arrested on December 12 in Nassau, Sam Bankman-Fried was already detained in the Bahamas.
In addition to risky transactions through Alameda, he is also suspected of investing some of this money in real estate in the Bahamas. He is also accused of making donations to Democratic politicians – again from FTX client funds – most notably Joe Biden during his presidential campaign.
Five of the eight charges against him each carry a maximum sentence of 20 years in prison.
The one who has long been seen as an iconoclastic cryptocurrency genius therefore risks spending the rest of his life in prison.
Caroline Ellison and Gary Wang have also been sued in a civil dispute by the two main US financial markets regulators, the SEC and the CFTC.
They have pledged to cooperate with the SEC and have acknowledged the facts attributed to them by the CFTC, which should merit them, in both cases, a more lenient judgment.
The CFTC estimates the total amount of funds embezzled from FTX client accounts to be $8 billion.
