- Among the new charges are the conspiracy to operate an unlicensed money transmitting business and committing bank fraud.
- The former FTX CEO has since pleaded not guilty to all the charges against him.
Additional charges have been brought against Sam Bankman – Fried, the FTX founder and former CEO currently facing eight counts of felony charges related to defrauding investors in his cryptocurrency empire, a case termed by the prosecutors as a billion-dollar fraud.
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The new charges, unveiled before the United States District Court Southern District of New York Thursday, include the conspiracy to operate an unlicensed money transmitting business, conspiracy to commit bank fraud, securities fraud, and fraud in connection with the purpose or sale of derivatives. Besides, the new indictment noted that SBF operated an illegitimate business contrary to what he proclaimed to the investors.
‘‘Sam Bankman-Fried a/k/a ‘SBF’, the defendant, well knew, FTX – which by early 2022 claimed to handle approximately $15 billion in daily trading volumes on its platform – was not focused on investor or client protection, nor was it the legitimate business that Bankman-Fried claimed it was. Contrary to Bankman-Fried’s promises to FTX customers that the exchange would protect their interest and segregate their assets, Bankman-Fried routinely tapped FTX customer assets to provide interest-free capital for his Alameda’s private expenditures,’’ read the report seen by CryptoWhat.
Emerging reports of dirty dealings in Alameda and FTX.US
The 39-page superseding indictment revealed damning reports where SBF acted to hide the alleged misappropriation of investor funds. For instance, he used a series of misleading tweets to deceive the public that the company’s balance sheet was in good shape, including falsely labeled books of accounts concealing an $8 billion hole in the firm’s books of accounts.
Also, in the efforts to misrepresent the books of accounts, the new charges showcased instances where SBF meddled with the activities of FTX.US, a departure from his claims that the company was independent. When told in a signal chat that FTX.US has a deficit of $45 million, SBF responded through a series of later deleted messages that he had transferred $46 million from Alameda to FTX.US, according to the prosecutors. All that is beside the unlimited line of credit that SBF and his lieutenants extended to Alameda without the investors’ knowledge.
The early counts of charges meted against the 30-year-old entrepreneur were: the 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 the conspiracy to defraud the US and violate campaign finance laws. SBF has since denied all the charges and is due to face trial on October 2.
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