On March 28, 2023, Samuel Bankman-Fried (a/k/a “SBF”), a founder and former chief executive officer of FTX Trading Ltd. (“FTX”), was indicted by federal prosecutors in the Southern District of New York on five additional charges, bringing the total number of charges against him to thirteen. FTX was a cryptocurrency exchange that filed for bankruptcy in November 2022. Bankman-Fried was initially indicted on December 13, 2022, on one count of conspiracy to commit money laundering, one count of conspiracy to commit securities fraud, one count of conspiracy to commit commodities fraud, two counts of conspiracy to commit wire fraud, two counts of wire fraud, and one count of conspiracy to violate federal campaign finance laws. The superseding indictment in March added one charge each of commodities fraud, securities fraud, conspiracy to commit bank fraud, conspiracy to operate an unlicensed money transmitting business, and conspiracy to violate the Foreign Corrupt Practices Act (“FCPA”). At his arraignment on March 30, 2023, Bankman-Fried pleaded not guilty to all charges.
The DOJ alleges that from 2019 until FTX’s collapse in November 2022, Bankman-Fried participated in a scheme to steal customer deposits and use those funds to (1) support the operations of FTX and Alameda Research, a quantitative cryptocurrency trading firm owned in part by Bankman-Fried, (2) make “speculative venture investments,” (3) donate money to charities, and (4) “enrich” Bankman-Fried. With respect to the FCPA-related charge, in 2021, Chinese law enforcement authorities froze certain Alameda cryptocurrency trading accounts. The DOJ alleges Bankman-Fried directed the payment of cryptocurrency to “one or more Chinese government officials” so that the accounts would be unfrozen. According to the DOJ, at the time the payments were made, the value of the cryptocurrency paid exceed $40 million.
Three former FTX or Alameda executives have already pleaded guilty in connection with this matter. On December 19, 2022, Zixiao (Gary) Wang, a founder and former Chief Technology Officer of FTX, pleaded guilty to conspiracy to commit wire fraud, wire fraud, conspiracy to commit commodities fraud, and conspiracy to commit securities fraud. That same day, Caroline Ellison, former CEO of Alameda, pleaded guilty to conspiracy to commit commodities fraud, conspiracy to commit securities fraud, conspiracy to commit money laundering, two counts of conspiracy to commit wire fraud, and two counts of wire fraud. On February 28, 2023, Nishad Singh, former Co-Lead Engineer of FTX, pleaded guilty to conspiracy to commit wire fraud, wire fraud, conspiracy to commit commodities fraud, conspiracy to commit securities fraud, conspiracy to commit money laundering, and conspiracy to make unlawful political contributions.
Superseding Indictment | Docket – Minute Entry (Arraignment) | DOJ Press Release – December 13, 2023 | DOJ Press Release – December 22, 2023 | Order- Ellison/Wang | Singh Information | Ellison Information | Wang Information