Sam Bankman-Fried Charged With Eight Criminal Counts—Including Wire Fraud And Campaign Finance Violations

Topline

U.S. prosecutors unsealed eight criminal counts against Sam Bankman-Fried on Tuesday, charging the former FTX boss and one-time cryptocurrency billionaire with wire fraud, money laundering and other criminal acts, following his arrest Monday in the Bahamas weeks after his crypto exchange collapsed.

Sam Bankman-Fried was arrested in the Bahamas on Monday.

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Key Facts

Bankman-Fried was indicted in New York federal court for conspiracy to commit wire fraud on customers, wire fraud on customers, conspiracy to commit wire fraud on lenders, wire fraud on lenders, conspiracy to commit commodities fraud, conspiracy to commit securities fraud, conspiracy to commit money laundering and conspiracy to violate U.S. campaign finance laws.

The indictment alleges Bankman-Fried “agreed with others to defraud customers of FTX.com by misappropriating those customers’ deposits and using those deposits to pay expenses and debts of Alameda Research,” a crypto trading firm founded by Bankman-Fried.

Bankman-Fried also allegedly provided “false and misleading information” to lenders about the “financial condition” of Alameda Research, and defrauded investors in FTX by misleading them about the cryptocurrency exchange’s finances, the indictment claims.

Prosecutors alleged some of Bankman-Fried’s millions of dollars in recent political donations were illegally made in the “names of other persons,” alluding to the misuse of FTX customer funds.

Crucial Quote

“I haven’t started thinking about trials or anything like that,” Bankman-Fried told Forbes on Monday hours before his arrest. “There’s going to be a time and place for that.”

Tangent

Prosecutors alleged some of Bankman-Fried’s millions of dollars in recent political donations were illegally made in the “names of other persons,” alluding to the misuse of FTX customer funds.

Key Background

Once worth more than $20 billion, Bankman-Fried’s fall from grace was swift, with FTX filing for bankruptcy last month amid concerns about FTX and Alameda’s intertwined and potentially illegal business practices, including reports FTX lent customer funds to Alameda. Bankman-Fried was surprisingly forthright for someone on the precipice of facing felony charges, conducting numerous media interviews over recent weeks and agreeing last week to testify before the House Financial Services Committee. Bankman-Fried’s testimony, scheduled for 10 a.m. EST on Tuesday, never happened, due to his arrest, though Forbes obtained what he planned to say before lawmakers. Bankman-Fried intended to blame others, including the head of rival exchange Binance, Changpeng Zhao, money-hungry law firms and his successor as FTX CEO, John J. Ray III, for FTX’s collapse and bankruptcy.

Big Number

$39.9 million. That’s how much Bankman-Fried gave to Democratic causes ahead of midterm elections, including at least $6 million to the Democrats’ House Majority political action committee. Bankman-Fried claims to have secretly donated millions more to Republicans.