The U.S. Department of Justice officially brought criminal charges against Sam Bankman Fried, former CEO and founder of FTX, after weeks of speculation. Bankman-Fried was taken into custody in the Bahamas on Monday, following U.S. charges.
U.S. Attorney Damian Williams announced via Twitter that the indictment would not be sealed Tuesday morning. The indictment was cited as being from a source with knowledge about the matter. New York Times According to reports, Bankman-Fried was charged by the Southern District of New York with wire fraud, conspiracy to commit wire fraud, securities fraud, conspiracy to commit securities fraud and money laundering.
Bankman-Fried was the only member of the FTX inner circle—which included Caroline Ellison, the former CEO of Alameda Research and SBF’s former girlfriend, and FTX co-founder Gary Wang—named in the indictment.
In addition to the Justice Department accusations, the U.S. Securities and Exchange Commission plans to file its case against Bankman-Fried tomorrow.
Gurbir Grewal, a SEC official, said that Sam Bankman-Fried was arrested on federal criminal charges. “The Securities and Exchange Commission has separately authorized charges relating to Mr. Bankman-Fried’s violations of our securities laws, which will be filed publicly tomorrow in the Southern District of New York.”
Since November’s collapse of FTX, Bankman-Fried had been under “supervision” by the Bahamas. The case was the subject of a legal dispute between the American government and the Bahamian government. Today’s charges could finally settle the dispute.
Although the former CEO was scheduled to testify before a U.S. House of Representatives Committee on Financial Services on the day following his arrest, he declined to testify to the U.S. Senate Banking Committee on Tuesday. Both hearings will likely go ahead without him.
“I am surprised to hear that Sam Bankman-Fried was arrested in the Bahamas at the direction of the United States Attorney for the Southern District of New York,” said Rep. Maxine Waters in a statement. “The public has waited eagerly for these answers under oath in Congress. This arrest denies the public that opportunity.”
“While I am disappointed that we will not be able to hear from Mr. Bankman-Fried tomorrow, we remain committed to getting to the bottom of what happened, and the Committee looks forward to beginning our investigation by hearing from Mr. John Ray III tomorrow,” she concluded.
Bankman-Fried, despite the advice from his lawyers, has been on an extensive media apologize tour that included an interview with New York Times Andrew Ross Sorkin, columnist, at the annual DealBook Summit.
Several agencies have launched investigations into FTX’s former CEO, including the Justice Department (SEC), CFTC and a few U.S. state regulatory agency.
Bankman-Fried could spend up to 20 years in federal prison if convicted of wire fraud.
Separately, members have called Gary Gensler, the chair of the Security and Exchange Commission to testify about how the Commission handled and failed to prevent the historic fall of crypto exchange FTX.
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