Sam Bankman-Fried, the former boss of the bankrupt and impoverished FTX crypto exchange, has been arrested by Bahamian authorities and faces extradition proceedings to the United States. US authorities believe that Bankman has been defrauding FTX customers from the start.
Bankman-Fried, who recently entered the ranks of the world's richest people before his bankruptcy, insisted that FTX's collapse was the result of bad bookkeeping, human error, and bad luck.
But a criminal indictment from the Southern District of New York revealed that authorities believe the 30-year-old man was involved in a scheme to defraud customers from the very beginning of the FTX company.
"In essence, Bankman-Fried placed billions of dollars in FTX customer funds into Alameda," the criminal charges claim as quoted by us from the ABC.
Alameda Research is a partner of FTX. "He then used Alameda as his personal piggy bank to buy luxury condominiums, support political campaigns, and make private investments, among others," the document states.
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Despite his scruffy appearance and billions of dollars in charitable promises, authorities say Bankman-Fried lives in a $43 million luxury penthouse in an elite Nassau complex.
"Bankman-Fried orchestrated a massive fraud for years, diverting billions of dollars from trading platform customer funds for his personal gain and to help grow his crypto empire," claims the Securities and Exchange Commission (SEC).
One of the more astonishing allegations is that Bankman-Fried appears to have lent himself $1.45 billion. According to documents seen by FTX's New CEO, John J Ray, the Bankman was both the recipient and the authorizer of a personal loan from Alameda.
"The FTX group's demise appears to have come from a concentration of absolute control in the hands of a small group of very inexperienced individuals," he said.