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Sam Bankman-Fried is extradited to the U.S. as two former FTX employees turn on him

FTX founder Sam Bankman-Fried, center, is escorted from the Magistrate Court in Nassau, Bahamas, Wednesday, Dec. 21, after agreeing to be extradited to the U.S.
Rebecca Blackwell
FTX founder Sam Bankman-Fried, center, is escorted from the Magistrate Court in Nassau, Bahamas, Wednesday, Dec. 21, after agreeing to be extradited to the U.S.

Updated December 22, 2022 at 11:00 AM ET

Sam Bankman-Fried has been extradited to the United States from his home in the Bahamas, to face a long list of charges related to the downfall of the crypto exchange he founded, FTX.

The 30-year-old is set to appear in court for an arraignment on Thursday, a little more than a week after he was arrested a the request of the U.S. government. He's accused of misleading investors and using billions of dollars from his customers for his own ends.

Bankman-Fried, who was FTX's CEO until a few hours before the company and its dozens of affiliates filed for bankruptcy last month, was taken in FBI custody and returned to the United States late Wednesday, according to theU.S. Attorney for the Southern District of New York, Damian Williams.

Two of Bankman-Fried's one-time friends and co-workers – Caroline Ellison and Gary Wang — have pleaded guilty to fraud charges by the SDNY and are cooperating with its investigation, Williams said.

Both have also been charged with defrauding investors by the Securities and Exchange Commission, the top Wall Street regulator, and are currently working with it in its investigation into Bankman-Fried, under the possibility of reaching a settlement with reduced penalties.

"Gary has accepted responsibility for his actions and takes seriously his obligations as a cooperating witness," Wang's attorney Ilan Graff said in a statement.

A spokesperson for Bankman-Fried declined to comment.

The SEC also alleges that Bankman-Fried and his colleagues planned to manipulate the price of FTT, an exchange crypto security token that was integral to FTX.

"When FTT and the rest of the house of cards collapsed, Mr. Bankman-Fried, Ms. Ellison, and Mr. Wang left investors holding the bag," SEC chairperson Gary Gensler said in the release. "Until crypto platforms comply with time-tested securities laws, risks to investors will persist."

Bankman-Fried is charged with allegedly defrauding customers and investors, as well as money laundering and making illegal political campaign contributions. The SEC and Commodity Futures Trading Commission are also investigating him for fraud.

Like much of what has happened in the weeks since FTX filed for bankruptcy, Bankman-Fried's extradition was complicated. After saying he would fight his removal, he signaled earlier this week that he would agree to extradition. A hearing on the extradition was abruptly scrapped over objections from his counsel. On Wednesday, Bankman-Fried agreed in court to be taken back to the United States, but the timing of his travel was unclear.

After launching the company three years ago, Bankman-Fried watched its value soar to some $32 billion. Earlier this year, splashy public relations blitz that included a Super Bowl ad and high-profile celebrity endorsements, promoted it as "the safest and easiest way to buy and sell crypto."

Then under a cloud of suspicions about its solvency, FTX abruptly filed for bankruptcy last month. And the company's new management says at least $8 billion of customer money has gone missing.

Now, Williams is calling it one of of the biggest frauds perpetrated in U.S. history and authorities have repeatedly referred to is as a "house of cards."

Copyright 2022 NPR. To see more, visit https://www.npr.org.

David Gura
Based in New York, David Gura is a correspondent on NPR's business desk. His stories are broadcast on NPR's newsmagazines, All Things Considered, Morning Edition and Weekend Edition, and he regularly guest hosts 1A, a co-production of NPR and WAMU.
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