SEC and CFTC file formal charges against FTX CEO Sam Bankman-Fried
Legal Troubles for FTX Founder and CEO Sam Bankman-Fried
- SBF legal troubles grow, as two USA government regulatory bodies file charges against him.
- Recent stories indicate charges have been filed against him.
- FTX is a cryptocurrency exchange that is headquartered in the Bahamas. It was founded by Sam Bankman-Fried in 2019. source
U.S. Commodity Futures Trading Commission
- The USA Government body, the Commodity Futures Trading Commission (CFTC) filed a lawsuit against Sam Bankman-Fried (SBF), FTX Trading LTD., and Alameda Research.
U.S. Securities and Exchange Commission SEC
- SEC Definition: An independent federal regulatory agency that is tasked with the oversight of the securities markets. One of the main goals is to protect investors from predatory and criminal activity.source
- The SEC has also revealed charges against the FTX co-founder. Fraud
What are the charges against Sam Bankman-Fried?
In the indictment unsealed on Tuesday morning, U.S. prosecutors said Bankman-Fried had engaged in a scheme to defraud FTX's customers by misappropriating their deposits to pay for expenses and debts and to make investments on behalf of his crypto hedge fund, Alameda Research LLC. source
Further charges include:
He also defrauded lenders to Alameda by providing false and misleading information about the hedge fund's condition, and sought to disguise the money he had earned from committing wire fraud, prosecutors said. source
SEC and CFTC
Both the U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) alleged Bankman-Fried committed fraud in lawsuits filed on Tuesday.
sourceThe CFTC sued Bankman-Fried, Alameda and FTX on Tuesday, alleging fraud involving digital commodity assets. source
SEC statement;
Since at least May 2019, FTX raised more than $1.8 billion from equity investors in a years-long "brazen, multi-year scheme" in which Bankman-Fried concealed FTX was diverting customer funds to Alameda Research, the SEC alleged. source
115 Years
U.S. prosecutors on Tuesday accused Sam Bankman-Fried, the founder of crypto currency exchange FTX, of fraud and violating campaign finance laws.
sourceU.S. Attorney Damian Williams in New York said Bankman-Fried made illegal campaign contributions to Democrats and Republicans with "stolen customer money," saying it was part of one of the "biggest financial frauds in American history."
sourceU.S. Attorney Damian Williams in New York said Bankman-Fried faces a maximum sentence of 115 years in prison if convicted on all eight counts, prosecutors said, though any sentence would depend on a range of factors.
source
Where is Sam Bankman-Fried?
- He was ordered remanded to a correctional facility in the island nation until Feb. 8, where he will initially held in the medical department, according to a local official. source
- A judge in the Bahamas denied him bail, sending him to a local correctional facility instead. Saying he was a flight risk.
source - The former FTX CEO, who was arrested in the Bahamas on Monday, lowered his head and hugged his parents after the magistrate judge refused bail citing a "great" risk of flight. source
Last words
- I am not one to celebrate anyone else’s misery.
- And we still don’t know if SBF will actually serve time in prison in the USA..
- But perhaps these events offer some solace to the literally one million FTX account holders who may never get their money back, and for many of them these deposits were their life savings.
- ‘I pray he survives this ordeal, and doesn’t die in custody, from suicide.
About @shortsegments
Shortsegments is a writer focused on cryptocurrency, the blockchain, non-fungible digital tokens or NFTs, and decentralized finance for over four years.
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Greatly appreciate your use of sourcing and summaries throughout this article - very nice work!
This is good news for cryptocurrency in one sense: that irresponsible behaviors leading to loss of funds for so many investors will now be under deep scrutiny. On the other hand, the increased regulation which may result from this case defeats one of the fundamental ideas of cryptocurrency: to remain decentralized.
I hope that decentralized exchanges, which do not require KYC (know-your-customer regulations), will grow as a result of this debacle. It will require responsibility on the part of the consumers. I personally used Bisq with great success, and that's due to its inherent escrow design.
Your welcome, thanks for stopping by my blog.
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https://twitter.com/blockchainchick/status/1602617986568933376?s=20&t=I5cJxThByhOkqbSMm7e5sQ
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source
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He is facing quite a few charges from different departments and I think he will take the fall for this crisis. However, I don't think that money that they stole is ever going back to the investors. He keeps saying he will make people whole but he doesn't have any way to make that money.
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I hadn't heard his promises to make people whole, but I can understand his willingness to make these claims. He was a successful arbitrage trader, and created an exchange that fulfilled a niche in cryptocurrency trading. If he had focused on using the legitmate profits of that exchange and creating more arbitrage possibilities he could have done well.
I agree he appears slated to take the fall for the fiasco, as seems just, as he created the beast. It will be interesting to know who contributed to this mess.
Fortunately, I am sure cryptocurrency will survive, and be made stronger.
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SBF is delusional. He even said once in one of those interviews that he could make people whole by making a second FTT token. He doesn't seem to understand that the money has to come from somewhere and I think he is just trying to save himself.
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Yes, he may well be... LOL
I am still trying to figure him out.
He looks down and away from the questioners sometimes, making me think he is lying, and then looks straight at them when saying something like he will make everyone whole. SO I susoect he combines lies with delusions.
Full video of the arrest:
https://twitter.com/tier10k/status/1602799576804728834
Thanks, I will add this to the article.
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It’s about time they gaffled him up.
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I must admit I thought they were taking a long time to arrest him, and wonder why they arrest him right before he testifies to Congress.
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source
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