In a new indictment, federal prosecutors brought a list of charges against Sam Bankman Fried, a former CEO of FTX.
According to the Southern District of New York indictment, Bankman Fried is facing six counts of fraud and one count of conspiracy for money laundering.
The fraud charges include conspiracy for wire fraud against customers, wire fraud upon lenders, commodities and securities fraud.
Just as many have already alleged, the Grand Jury says that Bankman-Fried indeed commingled or mishandled customer funds by using their deposits to conduct various transactions at Alameda Research, FTX’s trading firm.
“…In violation of Title 18, United States Code, Section 1343, to wit, BANKMAN-FRIED agreed with others to defraud customers of FTX.com by misappropriating those customers’ deposits and using those deposits to pay expenses and debts of Alameda Research, BANKMAN-FRIED’s proprietary crypto hedge fund, and to make investments.”
In its campaign finance violation case, the Grand Jury also claims that FTX contributed to public officials using false names.
“It was a further part and object of the conspiracy that SAMUEL BANKMAN-FRIED, a/k/a “SBF,” the defendant, and others known and unknown, would and did knowingly and willfully make contributions to candidates for federal office, joint fundraising committees, and independent expenditure committees in the names of other persons, aggregating to $25,000 and more in a calendar year…”
In addition to the New York State charges, the U.S. Securities and Exchange Commission has announced criminal charges against Bankman-Fried.
The SEC released Bankman-Fried’s indictment on the same day that the indictments were not sealed.
SEC Chair Gary Gensler said that Bankman-Fried built a “house of cards” with FTX while telling investors that it was “one of the safest buildings in crypto.”
“The alleged fraud committed by Mr. Bankman-Fried is a clarion call to crypto platforms that they need to come into compliance with our laws. With time-tested safeguards like properly protecting customer funds, and segregating conflicting business lines, compliance protects both investors on and those who are able to invest in crypto platforms.
It also provides information on trading platform conduct, both for investors and regulators via examination authority. To those platforms that don’t comply with our securities laws, the SEC’s Enforcement Division is ready to take action.”
Authorities in the Bahamas arrested the former billionaire Monday for the US. His net worth is believed to now be close to zero.
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