Federal Law Enforcement agencies are currently building a case to level charges of fraud against him.
is a type of deception when the quick profits paid to the initial investors from funds provided by later investors encourage belief in the success of an unrealized business. If this is the case, the federal authorities will be eager to throw the book at Bankman-Fried.However, running companies poorly is not a crime, as he has admitted repeatedly over the interim weeks. In interviews, including with Andrew Ross Sorkin, he has even seemed to blame Caroline Ellison, his colleague at Alameda.
Renato Mariotti, a former federal prosecutor and trial lawyer who has defended clients in derivative-related claims and securities class actions, says the most important question about Bankman-Fried is whether he intentionally misled FTX customers into thinking their money was available and not being used as collateral for loans or other purposes.
According to Richard Levin, a partner at Nelson Mullins Riley & Scarborough, where he chairs the fintech and regulation practice, he could face criminal action by the U.S. Department of Justice for "criminal violations of securities laws, bank fraud laws, and wire fraud laws.
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