Sam Bankman-Fried was denied bail in the Bahamas on Tuesday and was ordered held until February, hours after American authorities alleged the FTX co-founder engaged in a massive fraud scheme.
Bahamas Chief Magistrate JoyAnn Ferguson-Pratt remanded Bankman-Fried to the Bahamas State Department of Corrections until Feb. 8, 2023, Reuters reported.
He was arrested Monday at the request of the U.S. government. On Tuesday, the U.S. Attorney for the Southern District of New York, along with officials from the Commodity Futures Trading Commission and the Securities and Exchange Commission, described fraud allegations against the former billionaire in an unsealed indictment.
Federal prosecutors said the 30-year-old diverted investors’ money to cover expenses, debts and risky trades at his crypto hedge fund, Alameda Research, in addition to making lavish purchases and illegal campaign contributions without telling his customers.
He is charged with several crimes, including wire fraud, money laundering and conspiracy to commit fraud. He faces multiple decades in prison.
“Mr. Bankman-Fried is reviewing the charges with his legal team and considering all of his legal options,” his lawyer, Mark S. Cohen, said in an earlier statement.
During Tuesday’s court hearing in the Bahamas, Bankman-Fried’s parents appeared to laugh at times while his father occasionally put his fingers in his ears as if to drown out the sound of the proceedings, Coindesk reported.
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FTX filed for bankruptcy on Nov. 11 when the firm ran out of money after the cryptocurrency equivalent of a bank run. Customers tried to withdraw their assets all at once because of growing doubts about the financial strength of the company and Alameda Research.
The alleged fraud resulted in billions of dollars lost in customer deposits.