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A magistrate judge in the Bahamas on Tuesday denied bail to FTX co-founder Sam Bankman-Fried, citing heightened flight risk, and said he should be remanded to Bahamian custody until February 8, 2023, hours after a U.S. federal criminal indictment against Bankman-Fried alleging a massive fraud at FTX was unsealed in New York City.
Bankman-Fried was arrested Monday evening by Bahamas law enforcement acting on a request from the United States Attorney for the Southern District of New York. Regulators from the Commodity Futures Trading Commission and the Securities and Exchange Commission also unveiled expansive allegations of fraud and deception by the onetime billionaire.
His legal team is planning to fight any extradition order, according to NBC News.
Bankman-Fried was charged with several counts in federal court, including wire fraud, securities fraud, money laundering, and campaign finance violations.
Reuters reported that Bankman-Fried lowered his head and hugged his parents, who are both Stanford Law professors. They have remained by his side throughout the ascent and stunning collapse of one of the world’s largest crypto exchanges.
Bankman-Fried’s parents were animated during the proceeding, at times laughing or putting their fingers in their ears, according to CoinDesk.
FTX’s collapse was precipitated when reporting by CoinDesk revealed a highly concentrated position in self-issued FTT coins, which Bankman-Fried’s hedge fund Alameda Research used as collateral for billions in crypto loans. Binance, a rival exchange, announced it would sell its stake in FTT, spurring a massive withdrawal in funds. The company froze assets and declared bankruptcy days later. Charges from the SEC and CFTC indicated that FTX had commingled customer funds with Bankman-Fried’s crypto hedge fund, Alameda Research, and that billions in customer deposits had been lost along the way.