Federal prosecutors on Tuesday charged FTX Trading founder Sam Bankman-Fried with eight counts of fraud, cash laundering and different monetary crimes, in response to an indictment unsealed Tuesday.
The U.S. lawyer’s workplace for the Southern District of New York alleges that Bankman-Fried knowingly defrauded prospects by utilizing their cryptocurrency belongings to pay for money owed and bills incurred by FTX’s hedge fund, Alameda Research. Bankman-Fried and different accomplices additionally purposely submitted inaccurate paperwork to lenders who despatched funds to Alameda, in response to the indictment.
The unsealed indictment additionally accuses Bankman-Fried of violating political contribution legal guidelines by donating to candidates and committees in New York’s Southern District underneath one other particular person’s title.
A lawyer for Bankman-Fried, Mark S. Cohen, stated Tuesday that Bankman-Fried is “reviewing the costs along with his authorized workforce and contemplating all of his authorized choices.
The most potential jail publicity from these expenses is 115 years, in response to Nicholas Biase, a spokesperson for U.S. prosecutors.
The expenses come on prime of fraud expenses the U.S. Securities and Exchange Commission introduced related fraud expenses towards Bankman-Fried and FTX on Tuesday, alleging in a lawsuit that the corporate prompted prospects to lose $8 billion in deposits.on Tuesday. The SEC has accused Bankman-Fried of commingling FTX prospects’ funds at Alameda to make undisclosed enterprise investments, lavish actual property purchases and huge political donations. The Commodity Futures Trading Commission
Authorities within the Bahamason behalf of the U.S. authorities for actions he allegedly engaged in whereas CEO of the now-bankrupt cryptocurrency change. He was scheduled to testify about FTX’s collapse on Tuesday earlier than the House Financial Services Committee, however his title has been faraway from the witness checklist.
Bankman-Fried had been underneath legal investigation by U.S. and Bahamian authorities following the collapse final month of FTX, which filed for chapter on Nov. 11.
FTX was one of many world’s largest cryptocurrency exchanges earlier than it immediately. Users withdrew roughly $5 billion of crypto belongings in a single day as considerations mounted over the change’s solvency.
FTX raised nearly $2 billion from traders over three years earlier than its collapse. The firm now owes, in response to chapter courtroom filings.
Since FTX collapsed, Bankman-Fried has been holed up in his Bahamian luxurious compound in Nassau. He has a proper to contest his extradition, which may delay however in all probability not cease his switch to the U.S.
New FTX CEO John Ray III, who is predicted to testify earlier than the House on Tuesday, stated this week that FTX collapsed as a result of the “very small group of grossly inexperienced and unsophisticated individuals” who had been operating the corporate “failed to implement virtually any of the systems or controls that are necessary for a company that is entrusted with other people’s money or assets.”
The Associated Press contributed to this report.