The founder and former CEO of FTX, Sam Bankman-Fried, was denied bail by a Bahamian judge on Tuesday after being charged with fraud and violating campaign finance laws .
Bankman-Fried was arrested in the Bahamas on Monday, and faced the judge who denied him bail for risk of flight the next day, according to Reuters.
The Former CEO Appeared In Public For The First Time Since November
In an indictment, prosecutors at the Southern District of New York Justice Department charged the FTX founder with eight counts of fraud.
These charges include lying to investors, which ultimately resulted in the judge's decision to deny him bail and order Bankman-Fried to stay in a correctional facility until February 8.
This marked a significant event in the recent continuous fall from grace for the businessman, who has a fortune valued at at least $20 billion from cryptocurrency.
The events follow a marathon hearing in the House of Financial Services Committee, where lawmakers are questioning the sudden collapse of FTX.
It can be remembered that the crypto company FTX, which was one of the world's largest cryptocurrency exchanges, abruptly fell this year.
Bankman-Fried has already apologized to the customers affected by the collapse, acknowledging oversight failings on his part.
However, the former CEO still argues that he did not think the oversight would result in any criminal liability, which could possibly land him prison time.
According to The Verge, at the hearing, the lawmakers agreed that the collapse of FTX warranted tighter regulation, but as the year is already ending, the committee will pick up negotiations in January.
"The arrest of Sam Bankman-Fried is welcome news, but it still does not get to the bottom of what happened at FTX, and why it happened, and who else may be responsible," Financial Services Chair Patrick McHenry says.
Read More: Former FTX CEO Sam Bankman-Fried May Not Testify on December 13th
This Could Be the Biggest Financial Fraud In American History
According to US Attorney Damian Williams, the FTX founder made illegal campaign contributions to Democrats and Republicans with stolen customer money.
In an announcement, he alleged that Bankman-Fried made tens of millions of dollars in campaign contributions in what could be the biggest financial scam in the history of the US.
Because of this, the former CEO faces a maximum sentence of 115 years in prison should he be convicted of all eight counts of fraud, depending on different factors.
MSN notes that the Securities and Exchange Commission also filed civil charges against Bankman-Fried for duping investors.
"Mr. Bankman-Fried is reviewing the charges with his legal team and considering all of his legal options," Mark S. Cohen, the FTX founder's lawyer, says.
It can be remembered that Bankman-Fried resigned as FTX's CEO last month after the cryptocurrency exchange was forced to file for bankruptcy after a multi-billion dollar liquidity crunch.
In the hearing, FTX's new CEO John J. Ray III testified that there was no proper record-keeping done on the company's financial dealings during his predecessor's tenure.
Related Article: FTX Former CEO Sam Bankman-Fried Arrested in the Bahamas
