Founder of FTX crypto exchange Bankman-Fried extradited to U.S.

FTX crypto-exchange founder Sam Bankman-Fried flew from the Bahamas to the United States Wednesday to face fraud charges, while federal prosecutors announced that two of his former business partners had pleaded guilty and are now cooperating with the prosecution.

Manhattan federal prosecutor Damian Williams posted a video on Twitter Wednesday saying that Caroline Ellison, formerly head of Alameda Research, and FTX co-founder Gary Wang had pleaded guilty to defrauding investors who invested in the cryptocurrency trading platform.

The news that two of Bankman-Friede’s closest business partners had decided to cooperate with prosecutors greatly increased the pressure on the former billionaire.

Williams said that Bankman-Fried was under FBI surveillance and urged other co-conspirators in the alleged fraud to come forward.

The Federal Securities and Exchange Commission said in a statement Wednesday that it had also indicted Ellison and Wang in connection with their involvement in a multi-year scheme to defraud FTX investors.

The Federal Commodity Futures Trading Commission also said it had filed fraud charges against Ellison and Wang.

Last week, federal prosecutors in Manhattan accused Bankman-Fried of stealing billions of dollars in assets from FTX clients to cover losses at his hedge fund, Alameda Research, in what prosecutor Williams called “one of the largest financial frauds in American history.”

The 30-year-old cryptocurrency mogul admitted mistakes in risk management at FTX, but insisted he didn’t think he should be criminally liable.

In the wake of the cryptocurrency boom, Bankman-Fried became a billionaire and influential political donor in the United States several times, but the collapse of FTX destroyed his wealth and tarnished his reputation. The reason for the collapse was a wave of client withdrawals amid concerns about commingling funds with Alameda Research.

Statements from Williams and the Securities and Exchange Commission came hours after Bankman-Fried flew out of the Bahamas, agreeing in court to be extradited to the United States.

He is likely to appear in federal court in Manhattan on Thursday. He is expected to be asked to plead guilty at his trial, and a judge will determine whether to release him on bail and under what conditions.

He is expected to face eight charges, including wire fraud, money laundering and campaign finance violations.