Sam Bankman-Fried Is Charged With Fraud and Illegal Campaign Contributions


The United States Attorney for the Southern District of New York charged disgraced FTX founder Sam Bankman-Fried (“SBF”) with eight criminal counts, including conspiracy and wire fraud, for allegedly misusing billions of dollars in customers’ funds prior to the collapse of his “House of Cards” cryptocurrency empire.[1]

The indictment, unsealed shortly after police in the Bahamas arrested SBF, details what is likely one of the biggest frauds in US history. SBF is alleged to have engaged in a scheme to defraud customers by misappropriating their deposits into FTX in order to pay for expenses and debts and to make investments on behalf of SBF’s crypto hedge fund, Alameda Research. Further, SBF is alleged to have made illegal campaign contributions to both Democrats and Republicans with customers’ deposits. 

FTX’s current CEO, John Ray III (yes, the same John Ray III that became the CEO of Enron and oversaw its liquidation during its years in bankruptcy) told congressional lawmakers on Tuesday that FTX lost $8 billion of customer money, stating that the company allowed “absolute concentration of control in the hands of a small group of grossly inexperienced, nonsophisticated individuals.”

This latest catastrophic implosion has reignited calls for US officials to regulate the largely unregulated cryptocurrency market. Having loaded FTX’s collapse and SBF’s fall from grace to their munition coffers, critics of the cryptocurrency industry ready themselves to welcome to the regulatory fray their advocate counterparts, who are now undoubtedly uttering “Alea iacta est[2] from across the aisle. 

 

[1] The indictment can be read at https://assets.bwbx.io/documents/users/iqjWHBFdfxIU/rrOLy0EvAlfc/v0 (last accessed Dec. 12, 2022)

[2] “The die is cast.”

 

About Faruqi & Faruqi, LLP

Faruqi & Faruqi, LLP focuses on complex civil litigation, including securities, antitrust, wage and hour and consumer class actions as well as shareholder derivative and merger and transactional litigation. The firm is headquartered in New York, and maintains offices in California, Georgia and Pennsylvania.

Since its founding in 1995, Faruqi & Faruqi, LLP has served as lead or co-lead counsel in numerous high-profile cases which ultimately provided significant recoveries to investors, direct purchasers, consumers and employees.

To schedule a free consultation with our attorneys and to learn more about your legal rights, call our offices today at (877) 247-4292 or (212) 983-9330.

About Zachary Crane

Zachary Crane's practice is focused on consumer protection litigation. Zack is an associate in the firm's New York office.

Tags: faruqi & faruqi, investigation, news, litigation, settlement notice, case, faruqi law, faruqi blog, faruqilaw, Zachary Crane, consumer litigation Zachary Crane Zachary Crane
Associate at Faruqi & Faruqi, LLP

New York office
Tel: (212) 983-9330
Fax: (212) 983-9331
E-mail: zcrane@faruqilaw.com
Social: LinkedIn

Finding us

Our Offices


Our offices are nationwide. If you have any questions about a case or our firm, please contact us.

New York

685 Third Avenue 26th Floor
New York, New York 10017
(212) 983-9330
(877) 247-4292
(212) 983-9331

California

1901 Avenue of the Stars Suite 1060
Los Angeles, California 90067
(424) 256-2884
(424) 256-2885

Georgia

3565 Piedmont Road NE Building Four, Suite 380
Atlanta, Georgia 30305
(404) 847-0617
(404) 506-9534

Pennsylvania

1617 JFK Boulevard, Suite 1550
Philadelphia, Pennsylvania 19103
(215) 277-5770
(215) 277-5771

Faruqi & Faruqi office in New York, New York

Faruqi & Faruqi office in Los Angeles, California

Faruqi & Faruqi office in Atlanta, Georgia

Faruqi & Faruqi office in Philadelphia, Pennsylvania