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FTX founder Sam Bankman-Fried has left the Bahamas on a flight to the US where he will face fraud charges.
Key points:
- Sam Bankman-Fried has been charged with fraud linked to the FTX collapse
- He is on his way back to the US after waiving his right to an extradition hearing
- His former colleagues Caroline Ellison and Gary Wang have pleaded guilty to defrauding FTX investors
His extradition came as US prosecutors announced two of his former associates had pleaded guilty to charges and were now cooperating with the government.
Federal prosecutors in the US announced that two of his former associates had pleaded guilty to charges and were now cooperating with the government.
Manhattan prosecutor Damian Williams said in a video posted on Twitter late on Wednesday night that Caroline Ellison, former CEO of Alameda Research, and Gary Wang, co-founder of FTX, had pleaded guilty to defrauding investors in the crypto-trading platform.
The revelation that two of Mr Bankman-Fried's closest former associates have decided to cooperate with the government is expected to significantly increase pressure on the former billionaire.
Mr Williams said Mr Bankman-Fried was now in FBI custody and on his way to the US.
He urged others involved in the alleged fraud to come forward.
"If you participated in misconduct at FTX or Alameda, now is the time to get ahead of it," Mr Williams said.
"We are moving quickly and our patience is not eternal."
"I also said that last week's announcement would not be our last, and let me be clear once again, neither is today's," he added.
In a separate statement on Wednesday evening, the US Securities and Exchange Commission (SEC) said it had also charged Ellison and Wang for their roles in a multi-year scheme to defraud equity investors of FTX.
The US Commodity Futures Trading Commission also said it had filed fraud charges against Ellison and Wang.
A lawyer for Ellison did not respond immediately to request for comment.
A lawyer for Wang said: "Gary has accepted responsibility for his actions and takes seriously his obligations as a cooperating witness."
Former CEO 'anxious to leave' Bahamas
Mr Bankman-Fried left the Bahamas courthouse, surrounded by guards with assault weapons, and entered a vehicle after the Ministry of Foreign Affairs signed off on allowing his extradition to the United States.
After initially saying he would contest the extradition, Mr Bankman-Fried agreed to extradition in part out of a "desire to make the relevant customers whole," according to an affidavit read in court on Wednesday.
In court he waived his right to the formal extradition proceedings.
Mr Bankman-Fried's defence lawyer Jerone Roberts, said his client was "anxious to leave".
During Wednesday's hearing, Mr Roberts, requested the "rule of speciality" be followed which says a person can be tried only on the charges for which they are extradited.
Mr Bankman-Fried has acknowledged risk-management failures at FTX, but has said he does not believe he has criminal liability.
He rode a crypto boom to become a billionaire several times over and an influential US political donor, before FTX's crash wiped out his wealth and tarnished his reputation.
The collapse was driven by a wave of customer withdrawals amid concerns over commingling of funds with Alameda.
The $US32 billion exchange declared bankruptcy on November 11, and Mr Bankman-Fried stepped down as CEO the same day.
'Biggest financial frauds in US history'
Federal prosecutors in Manhattan last week charged the 30-year-old cryptocurrency mogul with stealing billions of dollars in FTX customer assets to plug losses at his hedge fund, Alameda Research, in what US Attorney Damian Williams called "one of the biggest financial frauds in American history".
The Securities and Exchange Commission alleged Mr Bankman-Fried illegally used investors’ money to buy real estate on behalf of himself and his family.
He could potentially spend the rest of his life in jail.
Mr Bankman-Fried was arrested last week in The Bahamas, where he lives and where FTX is based.
He is due to land in New York and will likely appear in front of a US judge on Thursday (local time), where he can apply for bail.
Reuters/AP