Federal Grand Jury indicts FTX Co-Founder in Manhattan, Bahamian Magistrate Rejects SBF’s Bail

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Sam Bankman-Fried (SBF), the disgraced former CEO of FTX, is named in an indictment that was unsealed by a federal grand jury in Manhattan on December 13, 2022. According to a press release from the SDNY Department of Justice (DOJ), SBF is charged with “conspiracy to commit wire fraud, conspiracy to commit wire fraud, conspiracy to commit commodities fraud, conspiracy to commit securities fraud, conspiracy to commit money laundering, conspiracy to defraud the Federal Election Commission.”

Investigators add that since 2019, “Bankman-Fried and his co-conspirators perpetrated a scheme to defraud customers of FTX by misappropriating billions of dollars of those customers’ funds.” According to the SDNY DOJ indictment, it states that SBF faces up to 165 years in prison.

Furthermore, according to the DOJ, SBF “allegedly used billions of dollars of FTX customer funds for his personal use, to make investments, and millions of dollars in political contributions to federal political candidates and committees.” The accusations brought against SBF by the U.S. Securities and Exchange Commission and the lawsuit brought by the Commodity Futures Trading Commission come after the news from the DOJ’s Manhattan team (CFTC).

The allegations against the executives of SBF and FTX are detailed in both the CFTC’s and the SEC’s accusations. Damian Williams, an attorney with the SDNY, stated in a statement on Tuesday that he thinks the fraud was blatantly deliberate. According to U.S. attorney Williams in the DOJ press release, “One month ago, FTX collapsed, causing billions of dollars in losses to its customers, lenders, and investors,” said U.S. attorney Williams in the DOJ press release.” Williams continued: “Now, a federal grand jury in New York has indicted the former founder and chief executive officer of FTX and charged him with crimes related to the phenomenal downfall of that one-time cryptocurrency exchange, including fraud on customers, investors, lenders, and our campaign finance system. As today’s charges make clear, this was not a case of mismanagement or poor oversight, but of intentional fraud, plain and simple.”

Strangely, Sam Bankman-Fried is the only person charged in the SEC, CFTC, and SDNY DOJ cases in addition to his firms; Caroline Ellison, a former executive at Alameda, is not mentioned. Furthermore, there have been speculations and allegations that Ellison may have leaked information to SBF. SBF has reportedly “suffered from depression, sleeplessness, and ADD for over a decade,” according to Bankman-Fried’s lawyer, who is requesting that SBF be granted bail.

Michael J. Driscoll, the assistant director of the FBI’s New York Field Office, issued a warning to other financial institutions in the SDNY DOJ press release on Tuesday, saying that the FBI “will be persistent in our efforts to bring you to justice” if they “deceive and defraud” clients. 

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