FTX crypto boss Sam Bankman-Fried denied bail in Bahamas

Sam Bankman-Fried leaving court in Nassau, The Bahamas after being denied bail

Sam Bankman-Fried, founder of the failed cryptocurrency exchange FTX, has been denied bail by a judge in the Bahamas.

US authorities charged Mr Bankman-Fried with "one of the biggest financial frauds in US history" on Tuesday.

The ex-FTX boss built a "house of cards on a foundation of deception," Securities and Exchange Commission (SEC) Chair Gary Gensler said.

Mr Bankman-Fried has indicated that he will fight extradition to the US.

Bahamas Chief Magistrate JoyAnn Ferguson-Pratt denied the petition for his release on bail, citing a "great" risk of flight, and ordered that he be kept on remand at a correctional facility until 8 February.

He was arrested in the Bahamas on Monday.

Last month, FTX filed for bankruptcy in the US, leaving many users unable to withdraw their funds. According to a court filing, FTX owed its 50 largest creditors almost $3.1bn (£2.5bn).

Among the most serious allegations against Mr Bankman-Fried is that he used billions of dollars of customer funds to prop up his investment trading company, Alameda.

It is unclear how much people who have funds in the exchange will get back at the end of bankruptcy proceedings - though many experts have warned it may be a small fraction of what they deposited.

Mr Bankman-Fried faces eight criminal charges in the US, including wire fraud, money laundering and conspiracy to defraud. He also faces civil charges including misleading investors who put more than $1bn into the company.

Officials have also accused him of violating campaign finance laws.

• FTX boss ran crypto firm as his 'personal fiefdom'

• Bitcoin to blockchain: What key crypto words mean

At a news conference on Tuesday, Damian Williams, the US Attorney for the Southern District of New York, described the fraud Mr Bankman-Fried is accused of as among the largest in US history.

Besides accusing Mr Bankman-Fried of defrauding lenders, investors and customers, Mr Williams alleged he had used "tens of millions" in ill-gotten gains for illegal campaign contributions to Democrats and Republicans alike.

"All this dirty money was used in service of Bankman-Fried's desire to buy bipartisan influence and impact the direction of public policy in Washington," Mr Williams said.

In previous media interviews, the crypto tycoon has admitted to mistakes, but denied intent to defraud his customers.

Mr Bankman-Fried also denied allegations he must have been aware that FTX's affiliated trading company, Alameda Research, was using FTX customer funds.

He was once viewed as a young version of legendary US investor Warren Buffett. As recently as late October, he had a net worth estimated at more than $15bn (£12.1bn).

Meanwhile, the firm's new chief executive, John Ray, told a US congressional committee that FTX's collapse appeared to be the result of it being controlled by a small group of "grossly inexperienced, non-sophisticated individuals".

He said he had seen "an utter lack of record-keeping - no internal controls whatsoever".

The FTX exchange allowed customers to trade normal money for cryptocurrencies such as Bitcoin.

Cryptocurrencies are not currencies in the traditional sense, but are stored online and act more like investment vehicles or securities - often with a high degree of volatility.

Their anonymity means they have been favoured for criminal activities such as drug dealing and ransomware attacks, but their supporters say there is huge potential for innovation - and independence from governments.