Sam Bankman-Fried, the disgraced founder and former CEO of cryptocurrency exchange FTX, has been denied bail by a judge in the Bahamas.
On Tuesday, a Bahamian judge denied SBF bail, hours after U.S. prosecutors alleged the crypto boss defrauded customers, misappropriated billions of dollars, and violated campaign laws in what has been described as one of America’s biggest financial frauds, according to a report by Reuters.
SBF was remanded to The Bahamas’ only prison – Fox Hill. The facility is known to be overcrowded and have unsanitary conditions, per human rights reports.
The government of The Bahamas arrested SBF on Monday following the “receipt of formal notification from the United States that it has filed criminal charges against SBF and is likely to request his extradition.”
The Southern District of New York, which is investigating Bankman-Fried and the collapse of FTX and its sister trading firm Alameda, indicted SBF on eight criminal charges including wire fraud and conspiracy by misusing customer funds. If convicted on all eight counts, he could face up to 115 years in prison, CNN reported.
Separately, the Securities and Exchange Commission charged SBF with “orchestrating a scheme to defraud equity investors in FTX.” SEC Chair Gary Gensler said in a statement”
“We allege that Sam Bankman-Fried built a house of cards on a foundation of deception while telling investors that it was one of the safest buildings in crypto. The alleged fraud committed by Mr. Bankman-Fried is a clarion call to crypto platforms that they need to come into compliance with 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 proceedings, despite claims by the former CEO that their US exchange was fine.
SBF, who recently invited the BBC to his mansion in The Bahamas, told the media that he hopes to start a new business and earn enough money to pay back victims of the collapse.
He also denied fraud allegations, saying, “I didn’t knowingly commit fraud, I don’t think I committed fraud, I didn’t want any of this to happen. I was certainly not nearly as competent as I thought I was.”
However, Gurbir Grewal, Director of the SEC’s Division of Enforcement, said that FTX’s promise of high-level investor protection principles and detailed terms of service “wasn’t just thin, it was fraudulent.”
John Ray III, the new CEO of FTX, has also claimed that SBF’s crypto empire had virtually no corporate controls and a surprising lack of financial and other record-keeping, saying that he has never seen such an “utter failure” of corporate controls in his entire career.