From Trading Desk to Courtroom: The Latest Twist in Sam Bankman-Fried’s Legal Saga

The founder of the crypto trading platform FTX, Sam Bankman-Fried, is now facing four new criminal charges, as federal prosecutors allege that he was involved in a billion-dollar fraud. Bankman-Fried is already facing a number of charges, including wire fraud and securities fraud, and the new charges only increase his potential liability.

The new charges, unsealed in a superseding indictment on Thursday, present a more serious picture for the so-called Crypto King.

“We are working hard and will continue to do so until justice is served,” said Damian Williams, the US attorney for the Southern District of New York, whose office is investigating the collapse of FTX.

Bankman-Fried was charged in December with eight counts of fraud. Thursday’s indictment added four new charges, including conspiracy to operate an unlicensed money transmitting business, conspiracy to commit bank fraud, securities fraud, and fraud in the connection of the purpose or sale of a derivative.

Prosecutors allege that Bankman-Fried and others misused customer accounts at the trading platform FTX to bolster sister hedge fund Alameda Research’s business operations, enrich himself, make venture investments, and try to buy influence with US politicians. Bankman-Fried is said to have raised at least $1.8 billion from investors.

The indictment alleges that the defendant well knew that FTX – which by early 2022 claimed to handle approximately $15 billion in daily trading volume on its platforms – was not focused on investor or client protection, nor was it the legitimate business that Bankman-Fried claimed it was.

Bankman-Fried, who was released on a $250 million bond and under home confinement at his parent’s Palo Alto, Calif. home, pleaded not guilty to the charges announced in December. At the time he was charged with multiple counts of conspiracy, wire fraud and conspiring to violate US campaign finance laws by making illegal political donations.

Bankman-Fried, the mastermind behind the massive bank fraud scheme, will be arraigned on the new charges at a future date. He now faces a maximum of 155 years in prison, if convicted on all counts. Two of his top lieutenants, Gary Wang and Caroline Ellison, have pleaded guilty to numerous charges and are cooperating with investigators. This could be the end of the line for Bankman-Fried, as investigators are getting closer and closer to him.

The superseding indictment released today lays out the alleged fraud in greater detail than the indictment unsealed in December when Bankman-Fried was arrested in the Bahamas where he lived. The 39-page document outlines how Bankman-Fried is accused of bilking investors out of millions of dollars through a Ponzi scheme.

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