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Sam Bankman-Fried hit with further criminal charges

US prosecutors have widened their felony case towards Sam Bankman-Fried, including new expenses and detailing a “sequence of techniques and schemes” via which they allege the FTX founder siphoned off billions of {dollars} from buyer deposits.

The up to date indictment, launched on Thursday morning, added expenses together with securities fraud and conspiracy to commit financial institution fraud. That introduced the entire variety of felony counts towards the previous billionaire to 12.

Bankman-Fried was initially charged with eight felony counts in December 2022 and was extradited from his dwelling within the Bahamas quickly afterwards. He has pleaded not responsible to all the unique expenses.

The 39-page doc particulars how Bankman-Fried posted “a sequence of false and deceptive tweets” within the days following revelations a few gap within the cryptocurrency alternate’s stability sheet in November. It additionally claims Bankman-Fried sought to affect politicians of each main US political events by donating tens of thousands and thousands of {dollars} to campaigns.

A few of the greater than 300 donations made to Democrats and Republicans have been “made within the names of others as a way to obscure the true supply of the cash and evade federal election legislation”, which allowed Bankman-Fried to “evade contribution limits on particular person donations to candidates to whom he had already donated”, the prosecutors alleged.

In a single instance, Bankman-Fried allegedly authorised a donation of no less than $1mn to a congressional candidate working within the 2022 election, who “seemed to be affiliated with pro-LGBTQ points”.

A political marketing consultant working for Bankman-Fried requested a 3rd celebration to make the contribution and mentioned: “Typically, you being the centre-left face of our spending will imply you giving to a variety of woke shit for transactional functions,” the prosecutors alleged.

Earlier than FTX’s collapse final 12 months, Bankman-Fried turned the de facto face of the crypto trade and had testified earlier than highly effective congressional committees. The previous FTX chief government was vocal in his assist for crypto-focused laws within the US and have become the second-largest contributor to the Democrats earlier than final 12 months’s midterm elections.

A consultant for Bankman-Fried declined to remark.

The brand new cost sheet consists of proof that seems to return from two of Bankman-Fried’s closest former colleagues — the pinnacle of FTX’s buying and selling affiliate Alameda, Caroline Ellison, and FTX co-founder Gary Wang. Ellison and Wang pleaded responsible to felony expenses in December and agreed to co-operate with US prosecutors.

As FTX was collapsing, Bankman-Fried “doubled down on his fraudulent schemes by soliciting billions of {dollars} in extra capital investments from current and potential buyers in FTX, lots of whom he had beforehand defrauded”, the indictment alleged.

Bankman-Fried despatched a falsely labelled stability sheet to buyers in November to guarantee them FTX had the funds to fulfill withdrawal calls for, however which in reality obscured an $8bn gap, the prosecutors mentioned. He had beforehand devised methods of disguising how FTX cash was getting used to make investments by way of Alameda, they alleged.

“Regardless of representations [Bankman-Fried] made and prompted to be made on the contrary, FTX by no means held buyer funds in devoted accounts for the good thing about prospects or segregated from Alameda’s belongings,” the indictment alleged.

A trial date has been set for October 2023.


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