Former cryptocurrency exchange entrepreneur Sam Bankman-Fried hugged his parents as he was denied bail after being charged with “one of the biggest financial frauds in American history”.
The former boss of failed cryptocurrency exchange FTX was arrested in the Bahamas on Monday and was charged by the US Securities and Exchange Commission (SEC) with fraud and violating campaign finance laws.
Following his arrest, a judge denied him bail and sent him to a local correctional facility instead.
Bankman-Fried was instead detained in custody in the Bahamas until at least February 8.
It marks a stunning fall from grace in recent weeks for Bankman-Fried, who amassed a fortune valued over $20 billion (£16.2bn) before his firm FTX abruptly collapsed this year.
US prosecutors allege Bankman-Fried had engaged in a scheme to defraud FTX’s customers by misappropriating their deposits to pay for expenses and debts.
At a news conference on Tuesday, Damian Williams, the US Attorney for the Southern District of New York, accused him of using "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.
Bankman-Fried faces a maximum of 115 years in prison if convicted on all eight counts he faces, prosecutors said.
He has earlier sought to distance himself from accusations of illegal activity.
Speaking earlier this month, he told the BBC: “I didn’t knowingly commit fraud.
“I don’t think I committed fraud. I didn’t want any of this to happen. I was certainly not nearly as competent as I thought I was”.
Last month, FTX filed for bankruptcy, leaving many unable to withdraw their funds. Court filings suggest FTX owed its 50 largest creditors almost $3.1bn (£2.52bn).
The FTX platform allowed customers to convert money for cryptocurrencies such as Bitcoin.
