US prosecutors charged Sam Bankman-Fried with an array of financial crimes and campaign donation violations on Tuesday.
The FTX founder is alleged to have diverted investors’ money to fund a lavish lifestyle and make risky investments in cryptocurrency.
The former billionaire was indicted on eight charges including wire fraud, money laundering, conspiracy to defraud the United States and campaign finance regulations.
Federal prosecutors in the US Southern District of New York said Mr Bankman-Fried “deliberately and knowingly” committed fraud on investors and customers since 2019.
Mr Bankman-Fried is accused of diverting customer funds from his crypto exchange FTX to the private hedge fund Alameda Research, which he also owned.
This caused both companies to collapse when cryptocurrency values plummeted.
The indictment said Mr Bankman-Fried had conspired with others to defraud FTX’s lenders “by providing false and misleading information to those lenders regarding Alameda Research’s financial condition”.
Prosecutors further allege that the 30-year-old broke campaign finance laws by masking political donations behind front companies and individuals to conceal and augment his influence.
The US Securities and Exchange Commission had earlier slapped Mr Bankman-Fried with civil charges for allegedly orchestrating a scheme to defraud investors.
The civil complaint states that Mr Bankman-Fried raised more than $1.8bn from equity investors since May 2019 by falsely promoting FTX as a safe, responsible platform for trading crypto assets.
“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,” said SEC Chair Gary Gensler in a statement.
A lawyer for Mr Bankman-Fried, Mark S Cohen, said on Tuesday he is “reviewing the charges with his legal team and considering all of his legal options”.
Mr Bankman-Fried was arrested in the Bahamas on Monday and faces extradition to the US to face a jury trial.
The failed crypto baron’s arrest took lawmakers by surprise, as he had been due to testify before a Congressional hearing on Tuesday.
Kaynak: briturkish.com