Sam Bankman-Fried is hit with four additional charges over collapse of his $250bn exchange FTX
Disgraced FTX founder Sam Bankman-Fried has been charged with four more counts of fraud in a new indictment, which accuses him of posing as the “savior of the cryptocurrency industry.”
Court documents released Thursday see Bankman-Fried charged with 12 offenses in total, which now include bank fraud and operating an unlicensed money transmitter.
Prosecutors also accuse him of having a messiah complex and presenting himself as a “savior” while boasting about FTX’s profits in a new indictment filed in Manhattan federal court. It is not known if Bankman-Fried will return to New York for a new arraignment.
The 30-year-old cryptocurrency trader was first indicted in December on eight criminal charges and was later extradited from the Bahamas. His trial is set for October 2023. The California native has pleaded not guilty to all charges.
Bankman-Fried already faced 115 years in prison, the new charges could bring an additional 40 years in prison, if convicted on all counts.
Court documents released Thursday see Bankham-Fried charged with 12 offenses in total, which now include bank fraud and operating an unlicensed money transmitter.
The new indictments accuse Bankman-Fried of posting “a series of misleading tweets” in the days leading up to FTX’s collapse. He is also accused of trying to buy political influence in the Democratic and Republican parties.
The charges accuse Bankman-Fried of making more than 300 illegal political donations in the United States.
The donations, totaling in the tens of millions of dollars, were illegal because they were attributed to a ‘fake donor’ or made with corporate funds, often allowing Bankman-Fried to evade contribution limits on individual contributions to the candidates, prosecutors said.
Replacement indictments are often used to add new defendants to a case, however no new defendants were named in the FTX case on Thursday.
There are anonymous co-conspirators cited in the new documents. Bankman-Fried is also charged with illegally transmitting money in the indictment.
“Leveraging the trust that FTX clients placed in him and his exchange, Bankman-Fried stole FTX client deposits and used billions of dollars in stolen funds for a variety of purposes,” a section of the statement read. presentation.
After founding FTX in 2019, Bankman-Fried boomed in the value of Bitcoin and other digital assets to reach an estimated net worth of $26 billion.
He became an influential figure in crypto technology in the United States until the exchange crashed in November amid a spate of customer withdrawals.
Bankman-Fried is accused of misleading investors and looting client deposits at FTX. It is supposedly one of the biggest frauds in the history of the United States.
Bankman-Fried was ordered to appear before a judge again this month after reports that he violated the conditions of his bail, including using a VPN to use the internet and contacting FTX’s former general counsel.
Twice in the past two weeks, he has appeared in court after prosecutors raised concerns that he may be communicating online in ways they cannot trace.
They have also said that his communications indicate that he may be trying to influence a witness with incriminating evidence against him.
Prosecutors notified the judge on February 13 that Bankman-Fried used a virtual private network, or VPN, to access the Internet twice in the past two weeks, including once after last Thursday’s hearing, which focused on restricting her communications.
The next day, Bankman-Fried’s lawyers, Mark Cohen and Christian Everdell, wrote to the judge to say that their client will not use the VPN until any concerns about it are resolved.
They defended its use, saying that he accessed the VPN on January 29 to watch the NFL championship games that determine which teams go to the Super Bowl and for the Super Bowl.
Judge Lewis A. Kaplan is now deciding how to toughen Bankman-Fried’s bail requirements to prevent any inappropriate communication.
Last week, he even suggested that Bankman-Fried may have to be jailed before trial if his communications cannot be monitored to ensure he is not tampering with witnesses.
FTX filed for bankruptcy on November 11 after running out of cryptocurrency equivalent to a bank run.
Since December, Bankman-Fried has been confined with electronic monitoring at his parents’ home in Palo Alto, California, following his release on a $250 million personal acknowledgment bond.
In addition to misleading investors, he is also accused of using money he stole from investors to finance risky trades at Alameda Research, his cryptocurrency hedge fund trading firm.
Caroline Ellison began her business career at Jane Street, a New York-based firm, in 2018 before moving to Alameda Research in 2020 after meeting Bankman-Fried. She is among her former inner circle and is now said to be cooperating with prosecutors in a case against her.
Gary Wang joined Ellison in pleading guilty to fraud charges, and is expected to testify in the upcoming Bankman-Fried trial.
Singh was a school friend of Bankman-Fried’s younger brother and a Facebook employee before his involvement with FTX.
Carolyn Ellison, a 28-year-old former CEO of Alameda Research, and Gary Wang, a 29-year-old co-founder of FTX, pleaded guilty to charges including wire fraud, securities fraud and commodity fraud in late December.
Ellison and Bankman-Fried were in an on-off romantic relationship.
“They are both cooperating with the Southern District of New York,” US Attorney Damian Williams said in a video statement posted to social media after the remarks.
He added that anyone else found to have participated in the fraud should contact his office because “our patience is not forever” and further criminal charges may be filed against others.
Ellison and Wang signed plea agreements on December 19, in part in exchange for a promise that prosecutors would recommend a reduction in their sentences if they fully cooperated in the investigation.
Without such an agreement, Ellison, who also faces a money laundering conspiracy charge, could face up to 110 years in prison. Wang could get up to 50 years.
Both were released on $250,000 bond after their secret court appearances with restricted travel to the continental United States.
“Gary has accepted responsibility for his actions and takes his obligations as a cooperating witness seriously,” said Wang’s lawyer, Ilan Graff.