Posts Tagged: BankmanFried
Sam Bankman-Fried sent to jail for witness tampering
FTX Founder Sam Bankman-Fried (SBF) was sent to jail Friday after the judge overseeing his case revoked his bail. US District Judge Lewis Kaplan found probable cause that the disgraced former CEO repeatedly tampered with witnesses. In addition, Kaplan rejected Bankman-Fried’s attorneys’ request to delay his detention pending appeal.
Prosecutors argued that Bankman-Fried tried to harass a crucial witness last month when he showed a New York Times reporter the personal writings of his former partner Caroline Ellison, a cooperating witness who pleaded guilty in December to criminal charges related to defrauding FTX investors. The prosecution said SBF’s actions were an attempt to damage her reputation and influence prospective jurors. Meanwhile, SBF’s defense team accused prosecutors of using evidence laden with “innuendo, speculation, and scant facts.” Judge Kaplan sided with prosecutors, saying Bankman-Fried attempted to “tamper with witnesses at least twice.”
Reutersreports that the 31-year-old former FTX boss was ushered out of the court by US Marshals “after removing his shoelaces, jacket and tie and emptying his pockets.” The former CEO had been under house arrest in California (at his parents’ home in Palo Alto) since he was extradited in December following his arrest in the Bahamas last December. His $ 250 million bail package tightly controlled his internet usage.
This article originally appeared on Engadget at https://www.engadget.com/sam-bankman-fried-sent-to-jail-for-witness-tampering-202906192.html?src=rss
Engadget is a web magazine with obsessive daily coverage of everything new in gadgets and consumer electronics
Sam Bankman-Fried pleads not guilty to latest fraud, bribery charges
FTX founder and former CEO Sam Bankman-Fried (aka SBF) pleaded not guilty to five additional criminal charges this morning, according toCNBC. Prosecutors accuse the disgraced crypto exec of fraud and bribery for conspiring to send at least $ 40 million to Chinese government officials so they would unfreeze more than $ 1 billion in cryptocurrency, which he allegedly used to fund loss-generating trades.
On Tuesday, the U.S. Attorney’s Office for the Southern District of New York (SDNY) unsealed the third round of criminal charges against SBF in a superseding indictment; SBF has now pleaded not guilty to all 13 charges. Additionally, he faces civil charges from the Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC). His attorney, Mark Cohen, claimed he would file a motion that SBF can’t be tried on charges brought after his extradition from the Bahamas in December.
Federal prosecutors allege SBF and his partners tried “numerous” legal and personal methods to unfreeze the funds before moving forward with the bribe. They say SBF directed Alameda Research, FTX’s sister company, to transfer more than $ 40 million to a private wallet. Of course, it’s illegal for US citizens to bribe foreign officials to generate business. The new charges ramp up pressure on the 31-year-old Bankman-Fried, who reportedly “arrived at the courthouse about an hour before the hearing, looking disheveled after an intense media scrum.”
Three former FTX executives, Caroline Ellison, Zixiao “Gary” Wang, and Nishad Singh, have pleaded guilty to fraud and conspiracy charges and have agreed to cooperate with the prosecution. There’s no word yet on the judge’s ruling about whether SBF will be forced to use a feature phone and limit internet access as part of his bail terms. After it was revealed SBF was using a virtual private network (VPN) and possibly tampering with witnesses, District Judge Lewis Kaplan previously said he didn’t want SBF “loose on his garden of electronic devices.”
This article originally appeared on Engadget at https://www.engadget.com/sam-bankman-fried-pleads-not-guilty-to-latest-fraud-bribery-charges-165445328.html?src=rss
Engadget is a web magazine with obsessive daily coverage of everything new in gadgets and consumer electronics
Federal prosecutors ask court to bar Sam Bankman-Fried from using Signal
US prosecutors have asked a federal court to tighten Sam Bankman-Fried’s bail conditions to prevent the disgraced entrepreneur from contacting his former colleagues. According to court documents seen by The New York Times, lawyers from the Department of Justice allege Bankman-Fried tried messaging the general counsel of FTX’s US arm over Signal and email earlier this month. The communication was “suggestive of an effort to influence Witness-1’s potential testimony,” the filing states.
“I would really love to reconnect and see if there’s a way for us to have a constructive relationship, use each other as resources when possible, or at least vet things with each other,” says one message Bankman-Fried sent, according to the Justice Department. The DOJ has asked the judge overseeing Bankman-Fried’s criminal case to bar him from contacting current and former FTX employees, as well as using Signal or any other encrypted or ephemeral messaging app. Following the request, SBF’s legal team accused federal prosecutors of trying to paint their client in the “worst possible light.” They claim Bankman-Fried tried contacting the general counsel of FTX US and CEO John Ray to offer “assistance,” not to interfere with his criminal case. His lawyers also claim a Signal ban isn’t necessary since Bankman-Fried is not using the app’s auto-delete feature.
Prosecutors allege SBF’s use of Signal is consistent with “a history” of using the app to hide his dealings at FTX. Prior to FTX’s implosion in November, Bankman-Fried and former Alameda Research CEO Caroline Ellison were reportedly part of a secret “Wirefraud” group chat on Signal. During his tenure at the exchange, SBF also allegedly directed employees to enable Signal’s disappearing messages feature.
Disgraced FTX founder Sam Bankman-Fried pleads not guilty to federal fraud charges
Sam Bankman-Fried, the disgraced founder and former CEO of crypto exchange FTX, has pleaded not guilty to federal wire fraud charges and other crimes. Bankman-Fried appeared before a Manhattan court on Tuesday, nearly two weeks after he was granted bail on a $ 250 million bond, and said he was innocent of charges laid against him by US prosecutors.
In addition to a civil suit from the Securities and Exchange Commission, SBF faces a criminal indictment from the Justice Department. Prosecutors have accused Bankman-Fried of leading a multiyear scheme to defraud investors and customers of FTX. SBF faces a total of eight criminal charges, including multiple counts of wire fraud. He is also accused of attempting to commit commodities fraud, as well as breaking federal election laws by donating more than is legally allowed and in the names of other people.
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FTX founder Sam Bankman-Fried agrees to extradition to the US
When the Bahamas Attorney General’s office announced that it had arrested former FTX CEO Sam Bankman-Fried, it noted that the former FTX CEO was likely to be extradited at the request of the United States. Just over a week later, that prediction has come true: Bankman-Fried signed extradition papers on Tuesday afternoon.
According to an unsealed indictment, Bankman-Fried is facing 8 counts of conspiracy to commit wire fraud, commodities fraud, securities fraud, and more. Specifically, the SEC accuses the cryptocurrency founder of “orchestrating a massive, years-long fraud” for “his own personal benefit and to help grow his crypto empire.” The Department of Justice has accused him of attempting commodities and securities fraud, conspiring to defraud investors and breaking federal election laws for donating more to political groups than is legally allowed.
Bankman-Fried originally planned to fight extradition, but indicated on Monday that he would reverse course. Now, he will be returning to the US to face those charges, a decision that might be easier on him in the short term. When the former CEO was first arrested in the Bahamas, he was denied bail and deemed a flight risk. In the United States, it’s possible he could be released on bail.
Bankman-Fried has previously said that he “didn’t ever try to commit fraud,” and doesn’t believe he’s criminally liable for the fall of FTX. The New York Times reports that a defense lawyer representing Bankman-Fried in the Bahamas says that he’s returning to the US because he “wishes to put the customers right, and that is what has driven his decision.”
Here’s everything Sam Bankman-Fried is accused of by the US government
On Monday evening, Bahamian authorities arrested FTX founder and former CEO Sam Bankman-Fried at the request of the US government. The following morning, the Securities and Exchange Commission (SEC), Department of Justice (DOJ) and Commodity Futures Trading Commission (CFTC) filed formal civil and criminal charges against Bankman-Fried in "parallel actions." It was a lot to take in all at once, so below Engadget has broken up current charges against SBF by agency, with some additional context provided.
Those indictments likely represent only the start of Bankman-Fried's troubles. In addition to the charges it announced on Tuesday, the SEC said it was investigating Bankman-Fried for other securities violations. The agency also announced that it’s actively examining the actions of other FTX executives and employees. As more charges are unsealed, Engadget will continue to update this article.
Securities and Exchange Commission
The Securities and Exchange Commission accused SBF of defrauding FTX investors and customers of more than $ 1.9 billion. Starting as early as May 2019 until as recently as this past November, "Bankman-Fried was orchestrating a massive, years-long fraud, diverting billions of dollars of the trading platform's customers funds for his own personal benefit and to help grow his crypto empire," the SEC said.
All the while, Bankman-Fried portrayed himself as a responsible business leader building a safe trading platform with "sophisticated, automated measures to protect customer assets." In reality, the SEC says, "Bankman-Fried orchestrated a fraud to conceal the diversion of customer funds to his privately-held crypto hedge fund, Alameda Research."
Today we charged FTX Trading Ltd CEO and co-founder Samuel Bankman-Fried with orchestrating a scheme to defraud equity investors. Investigations as to other securities law violations and into other entities and persons relating to the alleged misconduct are ongoing.
— U.S. Securities and Exchange Commission (@SECGov) December 13, 2022
Bankman-Fried told investors and customers FTX's sister company was just another platform on the exchange with no special privileges to speak of. "These statements were false and misleading," according to the SEC. Alameda had access to a "virtually unlimited 'line of credit" unknowingly funded by FTX customers. In May 2022, when Alameda's lenders demanded the firm repay loans worth billions of dollars, Bankman-Fried allegedly directed FTX to divert even more money to the hedge fund.
The SEC seeks to bar Bankman-Friend from trading securities in the future. The agency also wants to seize his ill-gotten gains and bar him from acting as an officer or director at another company.
Current FTX CEO John Ray III testified before the House Financial Services Committee on Tuesday — SBF had said he would attend the hearing before his arrest. Ray spoke to some of the allegations detailed by the SEC. "This is really old-fashioned embezzlement," he told the panel. "We've lost $ 8 billion. I don't trust a single piece of paper in this organization."
Department of Justice
In addition to civil charges, Bankman-Fried faces a criminal indictment from the Justice Department. On Tuesday, prosecutors from the Southern District of New York filed eight charges against the former executive, including multiple counts of wire fraud. The Justice Department alleges SBF conspired with other individuals to defraud investors by sharing misleading information about FTX and Alameda's financial condition. Prosecutors further accused him of attempting to commit commodities and securities fraud. On top of that, Bankman-Fried allegedly broke federal election laws by donating more than is legally allowed and in the names of other people.
Watch today's complete FTX hearing with CEO John Ray re-airing at 8pm ET on C-SPAN or anytime online here: https://t.co/UZeZcu93mcpic.twitter.com/qmLfR1VWiN
— CSPAN (@cspan) December 14, 2022
SBF spoke about his political donations in a recent interview with journalist Tiffany Fong. "I donated to both parties. I donated about the same amount to both parties," he said. "All my Republican donations were dark. The reason was not for regulatory reasons, it's because reporters freak the fuck out if you donate to Republicans."
It's worth emphasizing how serious the criminal charges against Bankman-Fried are. For context, a federal judge recently sentenced Theranos founder and former CEO Elizabeth Holmes to 11 years in prison for defrauding the company's investors and patients. Meanwhile, Ramesh "Sunny" Balwani, the startup's former chief operating officer, was sentenced to nearly 13 years in prison for his role in the scheme. Sam Bankman-Fried stands accused of defrauding investors of almost $ 2 billion, or about twice what investors lost to Theranos.
Commodity Futures Trading Commission
Rounding out the current charges against Bankman-Fried, the Commodity Futures Trading Commission accused the former executive of using Alameda Research to "surreptitiously" siphon customer funds. "At Bankman-Fried's direction, FTX executives created features in the underlying code for FTX that allowed Alameda to maintain an essentially unlimited line of credit on FTX," the regulator alleges. It adds that Alameda had other "unfair" advantages, including an exemption from the platform's auto-liquidation risk management process.
.@AOC (D-NY) questions new FTX CEO John Ray on timing of Sam Bankman-Fried's arrest by the Bahamian government. pic.twitter.com/2foxUpsitR
— CSPAN (@cspan) December 13, 2022
As early as May 2019, SBF and "at least one" other Alameda executive directed the firm to use FTX customer funds to trade on competing platforms and buy "high-risk" digital assets. Additionally, the CFTC alleges that Bankman-Fried and his cohorts "took hundreds of millions of dollars in poorly-documented 'loans' from Alameda," which they then used to purchase real estate and make political donations.
For his actions, the CFTC is seeking to ban Bankman-Fried from trading derivatives and impose civil penalties against him. It also wants to bar him from acting as a director or officer in the future.
US prosecutors are reportedly investigating FTX founder Sam Bankman-Fried for fraud
US federal prosecutors could be building a fraud case against FTX founder and former CEO Sam Bankman-Fried. Bloomberg reports Justice Department officials met with the crypto exchange’s bankruptcy team this week to discuss documents investigators aim to obtain from the company.
The meeting included prosecutors from the Southern District of New York, Assistant US Attorney Roos, agents from the Federal Bureau of Investigation, and lawyers from FTX. Roos, notably, was involved in the prosecution of Nikola founder Trevor Milton, who was convicted of misleading investors earlier this year. According to Bloomberg, potential charges were not discussed at the meeting that occurred this week.
The Justice Department is “closely” examining whether FTX improperly transferred hundreds of millions of dollars around the time the company declared bankruptcy on November 11th. It’s also probing whether the exchange broke the law when it moved funds to sister company Alameda Research.
In his recent New York Times interview, Bankman-Fried denied knowingly misusing customer funds. “Clearly, I made a lot of mistakes. There are things I would give anything to be able to do over again,” he said. “I did not ever try to commit fraud on anyone.” He will testify before the House Committee on Financial Services next week, a panel that will also include testimony from FTX’s current CEO, John J. Ray III. Ray has accused Bankman-Fried of making “erratic and misleading public statements” about FTX.