He's charged with devising “a scheme and artifice to defraud” FTX’s customers and investors, diverting their money to pay expenses and debts at his crypto hedge fund.
NEW YORK — The U.S. government charged Samuel Bankman-Fried, the founder and former CEO of cryptocurrency exchange FTX, with a host of financial crimes on Tuesday, alleging he intentionally deceived customers and investors to enrich himself and others, while playing a central role in the company’s multibillion-dollar collapse.
The charges laid out in the 13-page indictment could land Bankman-Fried in jail for decades, carrying maximum penalties of 115 years, according to Nicholas Biase, a spokesperson for U.S. prosecutors. Before the bankruptcy, he was considered by many in Washington and on Wall Street as a wunderkind of digital currencies, someone who could help take them mainstream, in part by working with policymakers to bring more oversight and trust to the industry.
The criminal indictment against Bankman-Fried and “others” at FTX is on top of civil charges announced Tuesday by the Securities and Exchange Commission and the Commodity Futures Trading Commission. The SEC alleges Bankman-Fried defrauded investors and illegally used their money to buy real estate on behalf of himself and his family.
At a congressional hearing Tuesday that was scheduled before Bankman-Fried’s arrest, the new CEO brought in to steer FTX through its bankruptcy proceedings leveled harsh criticism. He said there was scant oversight of customers’ money and “very few rules” about how their funds could be used.
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