NEW YORK (AP) — Sam Bankman-Fried, the co-founder of failed cryptocurrency exchange FTX, is expected to face court for the first time on Tuesday. He will then be tried in New York, Reuters reported on the basis of court records seen by the news agency.
US prosecutors suspect that Bankman-Fried, among other things, secretly lent FTX client funds to his trading firm Alameda Research, which used them for risky investments. He is also said to have violated political campaign finance laws and is guilty of money laundering.
FTX collapsed after customers massively withdrew their money from the platform, which could not pay off all credits. Bankman-Fried was arrested Dec. 12 in the Bahamas, where FTX is officially located. The next day FTX’s post-bankruptcy director told members of Congress that $8 billion in client assets were untraceable.
Two high-ranking business partners of Bankman-Fried have pleaded guilty to fraud and say they are cooperating with authorities. Alameda CEO Caroline Ellison and FTX co-founder Gary Wang.
