FTX’s Bankman-Fried faces new charges in updated indictment
NEW YORK –
FTX founder Sam Bankman-Fried confronted new fraud costs Thursday, as prosecutors accused him of dishonest 1000’s of traders out of billions of {dollars} whereas casting himself as a reliable ”savior of the cryptocurrency business“ – a picture boosted by celebrity-studded Super Bowl promoting and large donations to political figures.
New costs, together with securities fraud and conspiracy fraud counts, had been unveiled with the unsealing of the refreshed indictment in Manhattan federal courtroom.
In an announcement, U.S. Attorney Damian Williams hinted, as he has a number of occasions beforehand, that prosecutors weren’t completed constructing their case.
“We are hard at work and will remain so until justice is done,” he mentioned.
A spokesperson for Bankman-Fried’s attorneys declined remark.
The new costs raised the jail sentence Bankman-Fried may face if convicted from 115 years to 155 years, authorities mentioned.
It additionally boosted the variety of counts within the indictment to 12, as prosecutors extra completely and eloquently advised their story of what occurred to FTX, Bankman-Fried’s world cryptocurrency trade, and its affiliated cryptocurrency buying and selling hedge fund, Alameda Research.
The description solid FTX clients, traders, monetary establishments, lenders and the Federal Election Commission as victims of fraudulent schemes Bankman-Fried allegedly carried out from 2019 till final November.
Prosecutors mentioned Bankman-Fried stole billions of {dollars} in FTX buyer deposits to assist the operations and investments of FTX and Alameda and to fund speculative enterprise investments, make charitable donations and spend tens of hundreds of thousands of {dollars} on unlawful marketing campaign donations to Democrats and Republicans in an try to purchase affect over cryptocurrency regulation in Washington.
They mentioned Bankman-Fried solid himself as a “figurehead of a trustworthy and law-abiding segment of the cryptocurrency industry” that sought to guard traders and purchasers.
“As recently as late 2022, Bankman-Fried boasted about FTX’s profits and portrayed himself as a savior of the cryptocurrency industry, making venture investments and acquisitions purportedly to assist struggling industry participants,” the brand new indictment says.
Meanwhile, he spent hundreds of thousands of {dollars} on movie star commercials through the 2022 Super Bowl that promoted FTX because the “safest and easiest way to buy and sell crypto” and “the most trusted way to buy and sell” digital belongings, it states.
In actuality, prosecutors wrote, Bankman-Fried routinely tapped FTX buyer belongings to supply interest-free capital for his and Alameda’s non-public expenditures and within the course of “exposed FTX customers to massive, undisclosed risk.” They mentioned Bankman-Fried managed each firms and “used them to prop each other up, notwithstanding conflicts of interest and outright lies to the contrary.”
It was not identified when Bankman-Fried would return to Manhattan for an arraignment. Twice within the final two weeks, he has appeared in courtroom after prosecutors expressed concern that he could be speaking on-line in methods they can not hint. They have additionally mentioned his communications point out that he could be attempting to affect a witness with incriminating proof in opposition to him.
A decide is deciding easy methods to toughen Bankman-Fried’s bail necessities to forestall any improper communications. Last week, he even advised that Bankman-Fried may need to be incarcerated previous to trial if his communications can’t be monitored to make sure he isn’t tampering with witnesses.
Bankman-Fried has already pleaded not responsible to costs that he cheated traders and looted buyer deposits at FTX, his cryptocurrency platform. The costs accuse him of diverting cash from his traders partly to finance political donations and make dangerous trades by his cryptocurrency buying and selling hedge fund, Alameda Research.
Bankman-Fried was arrested within the Bahamas in December and was delivered to the United States quickly afterward. FTX filed for chapter on Nov. 11, when it ran out of cash after the cryptocurrency equal of a financial institution run.
He is free on a $250 million private recognizance bond. The bail association permits him to stay with digital monitoring at his dad and mom’ house in Palo Alto, California.
