Arrested in the Bahamas, the ex-boss of the FTX platform is notably being prosecuted for electronic fraud, money laundering and violation of electoral laws.
Sam Bankman-Fried, a former rising star in cryptocurrencies with his FTX platform and his brokerage company Alameda, was charged on Tuesday by American justice with fraud for having defrauded his customers and investors.
Arrested Monday in the Bahamas at the request of the United States, he is charged with a total of eight counts, including electronic fraud, money laundering and violation of electoral laws, according to the indictment unveiled by the federal prosecutor of New York.
Also prosecuted by financial market regulators, he must be presented Tuesday before the justice of the archipelago. Sam Bankman-Fried is accused of having, from the beginning of FTX in 2019, used the money deposited by customers wishing to speculate on cryptocurrencies to finance the activity – and the risky bets – of his brokerage company and of Alameda investment. He is also accused of having lied to investors lending money to Alameda about the real financial health of the company.
collapse of society
He has “builds a house of cards based on deception“said in a press release the president of the authority responsible for regulating Wall Street, the SEC, Gary Gensler.
The stock market policeman, who wonders about the more than 1.8 billion dollars raised by FTX from investors since at least May 2019, claims in particular that “SBF» is prohibited from buying or selling financial securities (except for his personal account) and that he can no longer exercise managerial functions. The US agency in charge of derivatives (CFTC) has also filed a complaint accusing the entrepreneur of fraud and misrepresentation.
“SBF“has chained media appearances for a month, despite the risk of trial for fraud after the spectacular implosion of the company, valued at 32 billion dollars at the start of the year.
Read alsoBankruptcy of FTX: the lessons of a scandal
The United States haslodged a complaint“against the 30-year-old, who resides in the Bahamas, and”will probably seek his extradition“Explained the Attorney General of the Bahamas, Ryan Pinder, in a press release relayed on Twitter. The two countries “have an interest in holding accountable individuals associated with FTX who may have betrayed the public trust and broken the law“, indicated Philip Davis, the Prime Minister of the archipelago located in the northeast of Cuba. The Bahamas will conduct its own “criminal investigation into FTX collapse“, he added, quoted in the press release.
“Inexperienced and not very knowledgeable”
In the USA, “if convicted of fraud, he could spend the rest of his life in prison, given the amount», Estimates Jacob Frenkel, of the firm Dickinson Wright. “There wouldn’t be an indictment if prosecutors weren’t absolutely confident they’re going to get a conviction.“, added this specialist in federal investigations, who worked for the American stock market policeman (SEC).
Sam Bankman-Fried was supposed to speak before a House of Representatives committee on Tuesday, as was John Ray, the new boss of FTX. The ex-leaders of the bankrupt platform have shown a “complete failure” at all levels of control, spending without really counting the money of their customers, said Monday John Ray, in a document published on the eve of the hearing in Congress.
Read alsoFTX scandal: Sam Bankman-Fried will testify on December 13 before the House of Representatives
At first glance, “the collapse of the FTX group appears to be the result of the absolute concentration of control in the hands of a very small group of grossly inexperienced and unsophisticated individuals, who have not implemented any of the systems or controls required for a corporation to whom other people’s money or assets are entrusted“, underlined the person in charge. Considered one of the world’s leading cryptocurrency exchanges, FTX was suddenly unable to return the money they had deposited there to its customers in early November. The group announced its bankruptcy filing on November 11.
The former muse of cryptos has chosen to multiply interviews and speeches on Twitter, despite the seriousness of the accusations against him. But his contrite air and his hesitant tone during his recent speeches offer a striking contrast to the reassuring image he had forged in recent years. “It was a very risky strategyremarks Jacob Frenkel. In the end, it islike he admitted he behaved criminally“.
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