FTX founder Sam Bankman-Fried was indicted on eight criminal charges including wire fraud and conspiracy by misusing customer funds, according to an indictment from the US Attorney of the Southern District of New York.
The 30-year-old Bankman-Fried was arrested at his home in the Bahamas on Monday and appeared in court in Nassau Tuesday. He did not waive his right to an extradition hearing, according to a US official.
Separately Tuesday, US markets regulators charged Bankman-Fried with defrauding investors and customers in his failed crypto exchange FTX
The Securities and Exchange Commission said Bankman-Fried, “orchestrated a years-long fraud” to conceal from FTX investors the diversion of customer funds to Alameda Research, his crypto-trading hedge fund.
“We allege that Sam Bankman-Fried built a house of cards on a foundation of deception while telling investors that it was one of the safest buildings in crypto,” SEC Chair Gary Gensler said in a statement.
The Commodity Futures Trading Commission also charged Bankman-Fried in a parallel action with the SEC.
Regulators signaled this may be just the first of multiple charges to come.
The SEC said there are ongoing investigations into “other securities law violations” and into other entities and individuals.
“Mr. Bankman-Fried is reviewing the charges with his legal team and considering all of his legal options,” said Mark S. Cohen, Bankman-Fried’s lawyer, said in a statement.
Prosecutors from the Southern District of New York unsealed an indictment Tuesday, charging Bankman-Fried with wire fraud and multiple counts of conspiracy, including conspiracy counts to defraud investors, lenders, and the United States, commit commodities and securities fraud and money laundering, and violate campaign finance laws.
Prosecutors allege Bankman-Fried conspired with others on numerous schemes, including misusing customer deposits held in FTX that were used to cover the expenses of Alameda.
Bankman-Fried also allegedly defrauded lenders to Alameda by providing them misleading information about the hedge fund’s financial condition.
The 14-page indictment also alleges that Bankman-Fried conspired with others to violate federal election laws by making political donations to candidates and fundraising committees between 2020 and November 2022, in excess of federal legal limits and in the names of other people.
In the four weeks since FTX filed for bankruptcy, Bankman-Fried said “I didn’t knowingly commit fraud. I didn’t want any of this to happen. I was certainly not nearly as competent as I thought I was.”
His once mighty business is registered in Antigua and Barbuda but never operated here as the FSRC refused to grant FTX a license.
The government says they are willing and able to provide any information to investigators about the former crypto module. (Source CNN).