Now, with the fraud fees filed earlier this week in opposition to Sam Bankman-Fried, the founding father of the bankrupt FTX change, Williams has additional solidified his workplace’s rising position in prosecuting monetary crimes involving cryptocurrency, in line with interviews with a half-dozen former prosecutors.
“Every U.S. attorney is defined in the public eye by some of the biggest cases that they bring,” stated Harry Sandick, a associate at regulation agency Patterson Belknap and former Manhattan federal prosecutor. “This will forever be connected to the current U.S. attorney.”
The indictment in opposition to Bankman-Fried – who was charged with utilizing billions in stolen buyer funds to purchase actual property, pay money owed for his hedge fund, Alameda Research, and donate to political campaigns – situates Williams as a main adversary for the high-profile entrepreneur whose downfall has captured public consideration and led to requires higher regulation of cryptocurrency platforms.
Bankman-Fried, 30, has acknowledged threat administration failures at FTX however stated he doesn’t imagine he has prison legal responsibility. His lawyer stated he’s evaluating his authorized choices. On Tuesday, a choose in The Bahamas ordered him detained there whereas he contests a U.S. extradition request.
Williams led the Southern District of New York’s (SDNY) securities and commodities process drive earlier than being nominated because the district’s high prosecutor by President Joe Biden. Williams, SDNY’s first Black U.S. legal professional, earned his regulation diploma from Yale and clerked for former Supreme Court Justice John Paul Stevens in addition to present Attorney General Merrick Garland when Garland was an appellate choose.
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Earlier this yr, Williams introduced the first-ever insider buying and selling instances involving digital property with fees in opposition to a former worker of non-fungible token buying and selling platform OpenSea in addition to a former product supervisor at Coinbase Global Inc, an FTX rival.
Both these defendants have pleaded not responsible.
SDNY has lengthy been generally known as some of the muscular enforcers of monetary crimes, and a few former prosecutors in contrast Williams’ string of crypto-related prosecutions to the give attention to insider buying and selling by Preet Bharara, who served as U.S. Attorney from 2009 to 2017 and secured convictions of fund managers reminiscent of Raj Rajaratnam.
Williams was a prosecutor on a number of high-profile monetary crimes instances throughout Bharara’s tenure, together with the insider buying and selling conviction of former Goldman Sachs board member Rajat Gupta and the fraud conviction of a former portfolio supervisor at Visium Asset Management LP.
“Crypto is the Wild West, but at the end of the day fraud is fraud,” stated Mike Ferrara, a former prosecutor and now an legal professional with Kaplan Hecker & Fink LLP in New York. “Damian is doing an excellent job of claiming, ‘we will push the envelope in crypto,’ the best way Preet was aggressive about insider buying and selling.”
A spokesman for Williams’ workplace declined to remark.
‘Come see us earlier than we come see you’
Pursuing cryptocurrency-related prosecutions shouldn’t be with out challenges. Defense attorneys might argue that as a result of the sector is comparatively new and questions on how it is going to be regulated are nonetheless being labored out, their shoppers weren’t clear on how legal guidelines crafted for conventional finance utilized to them.
“The government is having trouble keeping up and making clear to participants in the industry what they’re supposed to be doing,” stated Elise Maizel, a professor at NYU School of Law and former white-collar protection lawyer. “With these criminal cases, a lot of the time they’re regulating through enforcement.”
In one setback for prosecutors, three former founders of crypto change Bitmex and its first worker – who pleaded responsible to fees introduced by Williams’ predecessor of failing to ascertain an anti-money laundering program – earlier this yr obtained lighter sentences than prosecutors requested.
The choose in that case stated that whereas the crime was critical, prosecutors had not introduced extra weighty fees of cash laundering or fraud, and there have been no identifiable victims.
To make sure, Williams’ workplace has pursued extra conventional monetary crimes instances as properly, with fees filed this yr in opposition to the founding father of Archegos Capital Management for mendacity to banks to acquire loans earlier than the agency’s meltdown, and in opposition to the previous chief funding officer at a unit of Germany’s Allianz SE for inflating fund outcomes.
Both pleaded not responsible.
In the wake of Bankman-Fried’s arrest, Williams has made clear he would plow on with cryptocurrency enforcement. On Wednesday, he introduced wire fraud conspiracy fees in opposition to the founders of two separate cryptocurrency mining and buying and selling corporations he referred to as Ponzi schemes.
The 5 people charged in one of many instances have pleaded not responsible, whereas the three people charged within the different haven’t but entered pleas.
On Tuesday, Williams advised reporters extra fees within the FTX probe have been potential.
“This investigation is very much ongoing and it is moving very quickly,” Williams stated. “To anyone who participated in wrongdoing at FTX or Alameda Research and who has not yet come forward, I would strongly encourage you to come see us before we come see you.”