NY - Samuel Bankman-Fried (FTX), Alleged Fraud, Money Laundering, 2019-2022 *Arrest*

[Countem]

The below press releases from the SEC, Department of Justice, and CFTC provide a plethora of information about the developing situation.

I have quoted the charges and as well as what each entity is seeking.

SEC.gov | SEC Charges Samuel Bankman-Fried with Defrauding Investors in Crypto Asset Trading Platform FTX

www.sec.gov

The Securities and Exchange Commission […] charged Samuel Bankman-Fried with orchestrating a scheme to defraud equity investors in FTX Trading Ltd. (FTX), the crypto trading platform of which he was the CEO and co-founder. […]

According to the SEC’s complaint, since at least May 2019, FTX, based in The Bahamas, raised more than $1.8 billion from equity investors, including approximately $1.1 billion from approximately 90 U.S.-based investors.

The SEC’s complaint seeks injunctions against future securities law violations; an injunction that prohibits Bankman-Fried from participating in the issuance, purchase, offer, or sale of any securities, except for his own personal account; disgorgement of his ill-gotten gains; a civil penalty; and an officer and director bar.

United States Attorney Announces Charges Against FTX Founder Samuel Bankman-Fried

www.justice.gov

[A]n Indictment charging SAMUEL BANKMAN-FRIED, a/k/a “SBF,” with conspiracy to commit wire fraud, wire fraud, conspiracy to commit commodities fraud, conspiracy to commit securities fraud, conspiracy to commit money laundering, and conspiracy to defraud the Federal Election Commission and commit campaign finance violations [has been unsealed].

[The charges of] two counts of wire fraud conspiracy, two counts of wire fraud, and one count of conspiracy to commit money laundering, each [carry] a maximum sentence of 20 years. [SBF] is also charged with conspiracy to commit commodities fraud, conspiracy to commit securities fraud, and conspiracy to defraud the United States and commit campaign finance violations, each of which carries a maximum sentence of five years.

CFTC Charges Sam Bankman-Fried, FTX Trading and Alameda with Fraud and Material Misrepresentations | CFTC

www.cftc.gov

The complaint charges all three defendants with fraud and material misrepresentations in connection with the sale of digital commodities in interstate commerce. Further, the complaint asserts that defendants’ actions caused the loss of over $8 billion in FTX customer deposits.

In its continuing litigation against the Defendants, the CFTC seeks restitution, disgorgement, civil monetary penalties, permanent trading and registration bans, and a permanent injunction against further violations of the Commodity Exchange Act (CEA) and CFTC regulations, as charged.

 

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FTX ‘fraudster’ Sam Bankman-Fried makes second pitch for bail

It’s unclear what argument Sam Bankman-Fried put forward in his renewed bail application, but a local report said it would be heard on Jan. 17.

nypost.com

SBF has put forward a renewed bail application to be heard on January 17, 2023.

 

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Embattled Crypto Firm FTX Wants to Sell Its Functioning Units, Including LedgerX

FTX filed for bankruptcy last month, reporting it has more than $10 billion in liabilities.

www.coindesk.com

Please note that the court filing is linked within the original article.

Crypto exchange FTX petitioned a federal court for permission to sell several subsidiaries on Thursday[. …] These units include LedgerX, which also did business as FTX US Derivatives, FTX Japan, FTX Europe and Embed Business.

These units were relatively newly acquired subsidiaries of FTX and still had segregated assets and funds.

 

[Countem]

FTX’s Bankman-Fried could face long road to fraud trial

FTX founder Sam Bankman-Fried was swiftly indicted after the collapse of his crypto empire, but a trial in New York is likely more than a year away as prosecutors build out their case and both sides spar over evidence.

www.reuters.com

“A trial is probably 14 to 18 months out,” said MW, a white-collar criminal defense lawyer and former federal prosecutor.

Bahamas Says Extradition Fights Go Slow as Bankman-Fried Digs In

As disgraced FTX co-founder Sam Bankman-Fried prepares to fight being sent to the US to face criminal charges, the Bahamas’ top diplomat is warning that extradition battles can be long and tedious.

www.bloomberg.com

FM, the [Bahamas’] minister of foreign affairs, said an attempt to block removal from the Bahamas could drag on for months or even years.

 

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Exclusive: Sam Bankman-Fried to reverse decision on contesting extradition

Former FTX Chief Executive Sam Bankman-Fried is expected to appear in court in the Bahamas on Monday to reverse his decision to contest extradition to the United States, where he faces fraud charges, a person familiar with the matter said on Saturday.

www.reuters.com

BBM

Former FTX Chief Executive Sam Bankman-Fried is expected to appear in court in the Bahamas on Monday to reverse his decision to contest extradition to the United States[.]

 

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Ex-girlfriend of FTX founder 'has a choice to make' as she reportedly cooperates with officials: Marc Litt

Former U.S. attorney Marc Litt warned the ex-girlfriend of FTX founder Samuel Bankman-Fried is 'in the cross-hairs of the government' over the FTX collapse.

www.foxbusiness.com

The girlfriend of disgraced FTX founder Samuel Bankman-Fried [and CEO of Alemeda Research] reportedly cooperated with federal officials, it was revealed, shortly after he was arrested in the Bahamas in connection with the collapse of his crypto empire.

 

[Countem]

FTX founder Bankman-Fried sent back to Bahamas jail in day of courtroom chaos

Sam Bankman-Fried is returning to Bahamian prison after demanding to see a copy of his federal indictment.

www.cnbc.com

Reports over the weekend indicated that Bankman-Fried would consent to extradition, but the former crypto billionaire told a different story Monday, demanding to see a copy of his federal indictment before agreeing to return to the U.S. He will return to Fox Hill jail rather than surrendering himself to U.S. custody.

Bankman-Fried, dressed in a blue suit and white button down, was visibly shaking.

 

[Howl]

Bankman-Fried, dressed in a blue suit and white button down, was visibly shaking.

He's just had his first taste of jail, and is coming to understand what his future may hold. He claims he's a permanent resident of the Bahamas -- I wonder how that will affect his bail prospects once he's extradited to the US.

Apparently, his girlfriend, also involved in some aspect of the business, appears to be cooperating.

 

[Countem]

FTX's Bankman-Fried to agree to U.S. extradition in about-face after hearing -source

Sam Bankman-Fried has decided to agree to be extradited to the United States to face fraud charges, a person familiar with the matter said on Monday, just hours after the FTX founder's lawyer told a Bahamas judge he was not ready to consent.

www.reuters.com

Sam Bankman-Fried has decided to agree to be extradited to the United States to face fraud charges, a person familiar with the matter said on Monday, just hours after the FTX founder's lawyer told a Bahamas judge he was not ready to consent.

 

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https://www.cnn.com/2022/12/21/business/sam-bankman-fried-extradited-to-us/index.html

In a hearing Wednesday morning, SBF agreed to extradition to the US.

BBM

[SBF’s] attorney in the Bahamas, JR, said Bankman-Fried hoped to be extradited immediately. And US embassy representatives in the courtroom told CNN they were working on extraditing Bankman-Fried as soon as Bahamian officials turned him over to US custody.

Once he is stateside, Bankman-Fried will appear before a judge in Manhattan for a bail hearing.

Prosecutors and attorneys for Bankman-Fried are discussing an arrangement for his release, with conditions, that would enable the failed crypto entrepreneur to avoid spending time at the Metropolitan Detention Center.

 

[Howl]

"Prosecutors and attorneys for Bankman-Fried are discussing an arrangement for his release, with conditions, that would enable the failed crypto entrepreneur to avoid spending time at the Metropolitan Detention Center."

So...SRSLY? ...an arrangement for his release? Is this another one of those..."he'll stay in (fill in someone's name here)'s house with an ankle monitoring bracelet and private guards". Ghislaine Maxwell tried this approach. Didn't work. I hope it doesn't work for S B-F.

 

[Countem]

So...SRSLY? ...an arrangement for his release? Is this another one of those..."he'll stay in (fill in someone's name here)'s house with an ankle monitoring bracelet and private guards". Ghislaine Maxwell tried this approach. Didn't work. I hope it doesn't work for S B-F.

MOO, I have a fear that he may have agreed to a no-contest extradition from the Bahamas in exchange for some sort supervised release until trial in the U.S., but… we shall see!

 

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SEC.gov | SEC Charges Caroline Ellison and Gary Wang with Defrauding Investors in Crypto Asset Trading Platform FTX

www.sec.gov

Former Alameda Research CEO CE and Former FTX CFO and co-founder GW have plead guilty for their roles fraud perpetrated at FTX.

BBM

According to the SEC’s complaint, between 2019 and 2022, CE, at the direction of SBF, furthered the scheme by manipulating the price of FTT, an FTX-issued exchange crypto security token, by purchasing large quantities on the open market to prop up its price. [… B]y manipulating the price of FTT, SBF and CE caused the valuation of Alameda’s FTT holdings to be inflated, which in turn caused the value of collateral on Alameda’s balance sheet to be overstated, and misled investors about FTX’s risk exposure.

[F]rom at least May 2019 until November 2022, SBF raised billions of dollars from investors by falsely touting FTX as a safe crypto asset trading platform with sophisticated risk mitigation measures to protect customer assets […]; meanwhile, SBF and GW improperly diverted FTX customer assets to Alameda.

GW created FTX’s software code that allowed Alameda to divert FTX customer funds, and CE used misappropriated FTX customer funds for Alameda’s trading activity.

CE and GW have consented to bifurcated settlements, which are subject to court approval, under which they will be permanently enjoined from violating the federal securities laws, the above-described conduct-based injunctions, and officer and director bars. Upon motion of the SEC, the court will determine whether and what amount of disgorgement of ill-gotten gains plus prejudgment interest and/or a civil penalty is appropriate[.]

CE and GW are cooperating with the SEC’s ongoing investigation.

 

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Statement from the U.S. Attorney's Office for the Southern District of New York

https://twitter.com/x/status/1605745361842327552

 

[IQuestion]

SBF gets bail...250 million bail bond, home confinement in his parents California home. (On Bloomberg financial channel just now.) Geesh, for a guy who claims to now have only 100K...how in the world does one qualify? I realize his folks may have more money than the average investor, but really.

 

[Countem]

FTX's Bankman-Fried, charged with 'epic' fraud, released on $250 million bond

The bail package would require Bankman-Fried to surrender his passport and remain in home confinement at his parents' home in Palo Alto, California. He would also be required to undergo regular mental health treatment and evaluation.

www.reuters.com

Sam Bankman-Fried will be released on a $250 million bond package while he awaits trial on fraud charges related to the collapse of the FTX crypto exchange, a federal magistrate judge said on Thursday.

[The] bail package […] require Bankman-Fried to surrender his passport and remain in home confinement at his parents' home in Palo Alto, California. He [will] also be required to undergo regular mental health treatment and evaluation.

 

[Countem]

SBF gets bail...250 million bail bond, home confinement in his parents California home. (On Bloomberg financial channel just now.) Geesh, for a guy who claims to now have only 100K...how in the world does one qualify? I realize his folks may have more money than the average investor, but really.

Based on the Reuters article, it looks like his parents co-signed the bond and put up their home equity as assurance.

This has to be one of the largest posted bails!

 

[Gemmie]

SBF gets bail...250 million bail bond, home confinement in his parents California home. (On Bloomberg financial channel just now.) Geesh, for a guy who claims to now have only 100K...how in the world does one qualify? I realize his folks may have more money than the average investor, but really.

It's not home confinement at his parents home. Unless they have a house so large it fits in all of Northern California. LOL They're rich but not that rich. He was released to his parents home. He's restricted to No. CA which is raising some eyebrows.

Judge Gabriel Gorenstein said Bankman-Fried will require “strict” supervision following his release to his parents’ California home.

He must wear an electronic monitoring bracelet, submit to mental health counseling and will be restricted to the Northern District of California, according to the bail terms.

FTX co-founder Sam Bankman-Fried will be released on $250 million bail, judge rules

The 30-year-old appeared in court Thursday following his extradition from the Bahamas to face charges related to the collapse of crypto currency exchange FTX.

www.nbcnews.com

 

[Gemmie]

Based on the Reuters article, it looks like his parents co-signed the bond and put up their home equity as assurance.

This has to be one of the largest posted bails!

He's lucky he's not my son. I wouldn't have posted that much. Guess that would make me a bad mom. lol

 

[Gemmie]

SBF gets bail...250 million bail bond, home confinement in his parents California home. (On Bloomberg financial channel just now.) Geesh, for a guy who claims to now have only 100K...how in the world does one qualify? I realize his folks may have more money than the average investor, but really.

Looks like you were right and the article I saw allowing him access to No. CA isn't correct.

Federal prosecutors said the bail agreement will require Bankman-Fried to remain in home detention at his parents’ home in Palo Alto, Calif., and wear an electronic monitoring device.

Sam Bankman-Fried to be released on $250 million bond following first U.S. hearing

Bankman-Fried's top associates have started to flip as he stands accused of treating billions in customer funds as his own personal piggy bank.

www.marketwatch.com