FTX founder Sam Bankman-Fried was indicted on criminal charges including money laundering, wire fraud and violating campaign finance laws, an unsealed indictment from the US Attorney of the Southern District of New York revealed on Tuesday.
In total, the bureau charged Bankman-Fried on eight criminal counts including: conspiracy to commit wire fraud and securities fraud, individual changes of securities fraud and wire fraud, money laundering, and conspiracy to avoid campaign finance regulations.
US Attorney Damian Williams deemed the indictment of the former FTX CEO to be “one of the biggest financial frauds in American history.”
Separately Tuesday, it was also revealed that Bankman-Fried was also charged by the Securities and Exchange Commission (SEC) for various financial crimes including intentionally deceiving customers and investors in order to enrich himself and others. Federal prosecutors allege Bankman-Fried also violated multiple campaign finance laws by making secret political donations, and using customer funds in some of those cases.
In a complaint filed by the SEC, the 30 year-old allegedly diverted customer assets maintained by his company FTX, into his separate crypto hedge fund Alameda Research. Bankman-Fried then used customer funds to make “undisclosed venture investments, lavish real estate purchases, and large political donations.”
“Bankman-Fried raised more than $1.8 billion from investors, including US investors, who bought an equity stake in FTX believing that FTX had appropriate controls and risk management measures,” the complaint reads.
“Unbeknownst to those investors (and to FTX’s trading customers), Bankman-Fried was orchestrating a massive, years-long fraud, diverting billions of dollars of the trading platform’s customer funds for his own personal benefit and to help grow his crypto empire,” the complaint continues.
Revelation surrounding the newly unsealed indictment come after watchdog Citizens for Responsibility and Ethics in Washington (CREW) filed a complaint that alleged Bankman-Fried had earlier admitted to making contributions to both Democrats and Republicans. It was also outlined donations made to Republicans would likely make him “the second or third largest Republican donor.”
Another criminal indictment against Bankman-Fried alleged he and others violated multiple federal campaign finance laws by donating to political action committees under different names in the amount of, at least, $25,000.
The complaint brought by CREW alleges Bankman-Fried directed about $37 million, and maybe more “to influence federal elections while evading federal laws that require disclosure of the true source of contributions.”
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Mark Cohen, an attorney representing Bankman-Fried, has said that Bankman-Fried is presently "reviewing the charges with his legal team and considering all of his legal options."
Bankman-Fried was denied bail on Tuesday by a magistrate judge in the Bahamas, who cited the FTX figure as a potential flight risk. He is expected to remain in Bahamian custody.
News of the former FTX chief's arrest surfaced late Monday after Bahamian officials revealed in a press release that he had been taken into custody after US authorities had filed criminal charges against him.