FTX crypto Sam Bankman-Fried

Now under arrest, the fallen crypto mogul faces a barrage of charges, including defrauding investors out of billions.

(Puck) (FT) (NYT) (Insider) (WSJ) (Bloomberg) de la Merced](https://www.nytimes.com/by/michael-j-de-la-merced), [Lauren Hirsch](https://www.nytimes.com/by/lauren-hirsch) and (Reminder: The Fed’s rate-decision day comes tomorrow.) [accused the United States of trade protectionism](https://www.reuters.com/world/china/china-launches-suit-wto-against-us-chip-export-curbs-global-times-2022-12-12/) by effectively blocking tech companies from selling advanced chips to China, hampering the Chinese tech industry. [lawyer for Markus Braun](https://www.ft.com/content/c21eee97-3ecc-4fe4-a0e5-4abc8eedc60c) told a Munich court that prosecutors had ignored crucial evidence and relied on an untrustworthy witness. “In 2022, FTX began trying to separate Alameda’s portion of the liability in the “fiat @ftx.com” account from the portion that was attributable to FTX (i.e., to separate out customer deposits sent to Alameda-controlled bank accounts from deposits sent to FTX-controlled bank accounts). [His agency has charged](https://www.sec.gov/litigation/complaints/2022/comp-pr2022-219.pdf) S.B.F., as the entrepreneur is known, with defrauding investors in FTX out of $1.8 billion, including $1.1 billion from U.S.

The founder of the cryptocurrency exchange FTX was arrested in the Bahamas at the request of the United States.

Bankman-Fried about the actions that’ve harmed over one million people, and wiped out the hard-earned life savings of so many,” she said in a statement. In a complaint made public Tuesday morning, the SEC accused Bankman-Fried of defrauding investors. Bankman-Fried and other FTX executives also gave [ enormous amounts of money to politicians](https://www.washingtonpost.com/us-policy/2022/11/17/congress-crypto-ftx-regulations-law/?itid=lk_inline_manual_10), more than $70 million in the 2022 election cycle. Federal prosecutors for the Southern District of New York will unseal a criminal indictment against Bankman-Fried on Tuesday. The collapse is seen as a failure of oversight and regulation in an industry that has operated outside conventional banking rules. Maxine Waters (D-Calif.) said Monday night that Bankman-Fried had confirmed that he would testify — but then he was arrested. Born in California to Stanford Law professors, Bankman-Fried studied physics and math at the Massachusetts Institute of Technology before a stint on Wall Street. Bankman-Fried was slated to testify Tuesday before the House Financial Services Committee, but now that won’t happen. FTT’s price fell drastically when Changpeng “CZ” Zhao, the founder of a rival Binance, withdrew his money from the exchange. government and followed the collapse of the cryptocurrency exchange in November, when Bankman-Fried resigned and the company filed for bankruptcy, stunning its customers and investors. It also purchased advertising space on the uniforms of Major League Baseball umpires and sports stadiums. He has been a leading proponent of

(FTX), the crypto trading platform of which he was the CEO and co-founder. Investigations as to other securities law violations and into other entities and ...

Attorney’s Office for the Southern District of New York, the FBI, and the CFTC. The SEC’s complaint seeks injunctions against future securities law violations; an injunction that prohibits Bankman-Fried from participating in the issuance, purchase, offer, or sale of any securities, except for his own personal account; disgorgement of his ill-gotten gains; a civil penalty; and an officer and director bar. The complaint alleges that, in reality, Bankman-Fried orchestrated a years-long fraud to conceal from FTX’s investors (1) the undisclosed diversion of FTX customers’ funds to Alameda Research LLC, his privately-held crypto hedge fund; (2) the undisclosed special treatment afforded to Alameda on the FTX platform, including providing Alameda with a virtually unlimited “line of credit” funded by the platform’s customers and exempting Alameda from certain key FTX risk mitigation measures; and (3) undisclosed risk stemming from FTX’s exposure to Alameda’s significant holdings of overvalued, illiquid assets such as FTX-affiliated tokens. To those platforms that don’t comply with our securities laws, the SEC’s Enforcement Division is ready to take action." (FTX), the crypto trading platform of which he was the CEO and co-founder. Bankman-Fried is a clarion call to crypto platforms that they need to come into compliance with our laws.

Sam Bankman-Fried has had a dizzying fall from top of the heap in the world of cryptocurrencies to staring down a hefty jail sentence on a raft of fraud ...

“I didn’t ever try to commit fraud on anyone,” Bankman-Fried told a New York Times conference on Nov 30. He has said he maintains a spartan lifestyle, and has donated millions of dollars to causes such as animal welfare, reducing global warming, and combating neglected tropical diseases. The son of Stanford Law School professors and a graduate of the elite Massachusetts Institute of Technology (MIT), Bankman-Fried worked as a broker on Wall Street before turning to cryptocurrencies in 2017. The US Securities and Exchange Commission said the onetime crypto wunderkind was “responsible for fraudulently raising billions of dollars from investors in FTX and misusing funds belonging to FTX’s trading customers”. WASHINGTON: Sam Bankman-Fried has had a dizzying fall from top of the heap in the world of cryptocurrencies to staring down a hefty jail sentence on a raft of fraud charges. The 30-year-old billionaire founder of the FTX crypto exchange once partnered with celebrities and rubbed shoulders with politicians as he tried to legitimise cryptocurrency as more than just a shady get-rich-quick scheme.

Sam Bankman-Fried was photographed handcuffed Tuesday night after a judge denied him bail and remanded him to Bahamas' Fox Hill jail until February 2023.

Securities and Exchange Commission](https://www.cnbc.com/2022/12/13/sam-bankman-fried-ran-ftx-as-fraud-from-the-start-sec-charges.html) and [the Commodity Futures Trading Commission indicated](https://www.cnbc.com/2022/12/13/cftc-piles-on-with-new-charges-against-bankman-fried.html) that FTX had commingled customer funds with Alameda Research and that billions in customer deposits had been lost along the way. [reporting by CoinDesk](https://www.coindesk.com/business/2022/11/02/divisions-in-sam-bankman-frieds-crypto-empire-blur-on-his-trading-titan-alamedas-balance-sheet/) revealed a highly concentrated position in self-issued FTT coins, which Bankman-Fried's crypto hedge fund Alameda Research used as collateral for billions in crypto loans. [quashed any chance of Bankman-Fried's return](https://www.cnbc.com/2022/12/13/sam-bankman-fried-denied-bail-in-bahamas-on-ftx-fraud-charges-judge-cites-flight-risk.html) to his house. Citing a "great" risk of flight, the Bahamian justice remanded Bankman-Fried back to jail until his next scheduled hearing on Feb. [criminal charges in the United States](https://www.cnbc.com/2022/12/13/us-indicts-sam-bankman-fried-on-conspiracy-to-defraud-the-us-wire-fraud-securities-fraud-and-money-laundering.html), including securities fraud, campaign finance violations and money laundering, over the [implosion of his FTX crypto exchange](https://www.cnbc.com/2022/11/15/how-sam-bankman-frieds-ftx-alameda-empire-vanished-overnight.html). - Bankman-Fried has been charged in the U.S.

A criminal indictment unsealed on Tuesday and a complaint by the S.E.C. describe years of wrongdoing in Sam Bankman-Fried's crypto empire.

Bankman-Fried was scheduled to testify at a hearing on Tuesday in front of the House Financial Services Committee, which is investigating the collapse of FTX. In the early 2000s, Mr. [Sam Bankman-Fried](https://www.nytimes.com/2022/11/14/technology/ftx-sam-bankman-fried-crypto-bankruptcy.html?action=click&pgtype=Article&state=default&module=styln-ftx&variant=show®ion=MAIN_CONTENT_3&block=storyline_top_links_recirc)and how did he become the face of crypto? “One of the classic defenses in a white collar case is to plead ignorance,” she said. According to the complaint, FTX used a third of its revenues to buy FTT and remove it from the marketplace, artificially inflating its value. Bankman-Fried misled those investors in reports about the financial health of FTX and its described a scheme to artificially boost the value of a digital token called FTT, which was created by FTX and issued to some investors while Alameda used it as collateral for loans from other cryptocurrency firms. [rapidly unfolding collapse](https://www.nytimes.com/2022/11/14/technology/ftx-sam-bankman-fried-crypto-bankruptcy.html) of FTX, which has rocked the crypto industry. Bankman-Fried in the Southern District of New York say he repeatedly lied to customers, investors and lenders about the structure of his business empire and how he handled the billions of dollars in funds that crypto users deposited in his exchange. He was at the forefront of an industrywide effort to bring crypto into the mainstream of American commerce. From the founding of his cryptocurrency exchange FTX in 2019, Mr. Bankman-Fried was widely viewed ](https://www.nytimes.com/2022/05/14/business/sam-bankman-fried-ftx-crypto.html)as one of the few reliable figures in a freewheeling, loosely regulated industry.

Simply named “SBF,” Sam Bankman-Fried is a 30-year-old crypto celebrity-cum-outcast after his crypto exchange, FTX, filed for bankruptcy last month. The ...

As the impacts of FTX’s demise continue to spread, many have renewed their calls in the interests of protecting investors. SBF communicated with Reuters that he “disagreed with the characterization” of money movements. Around $5 billion was spent on “a myriad of businesses and investments” worth “only a fraction of what was paid for them.” He also highlighted over $1 billion in loans made to company insiders. The company also relied on “disappearing messaging” that erases communications after a time. The restructuring specialist is tasked with handling the company’s liquidation and finding answers to various mysteries about the company’s collapse. The Commodity Futures Trading Commission also filed a complaint against Bankman-Fried on claims of fraud and misrepresentation. And then the “crypto winter” hit in spring 2022. While the United States is pursuing its own criminal charges against Sam Bankman-Fried individually, The Bahamas will continue its own regulatory and criminal investigations.” Bankman-Fried was denied bail the next morning by a judge in the island nation. But in November, FTX and its affiliates filed for bankruptcy seemingly out of the blue. At the same time, Alameda Research – a separate company on paper – was accused of using FTX’s own coins as collateral for billions in crypto loans. Sam Bankman-Fried, founder and CEO of FTX, was arrested Monday evening in the Bahamas.

The feds arrested the FTX founder, but the SEC stopped short of declaring broader regulation on the chaotic cryptocurrency industry.

Torres wrote that Gensler was “singularly responsible for the regulatory failures surrounding the collapse of FTX.” [The 49 Most Anticipated Movies of 2023](https://time.com/6241650/most-anticipated-movies-2023/?utm_source=roundup&utm_campaign=20221216) [tackling the entire ecosystem](https://time.com/6236610/ftx-account-holders-money-back/), Congress appears no closer to coalescing on a regulatory approach than it was before the FTX debacle. If anything, I think it has added much more to think about in the next few months.” For months, Gensler has tried to argue that many cryptocurrencies are securities as opposed to commodities, which would give him oversight of them as opposed to the CFTC—a smaller regulatory agency that is often perceived as more crypto-friendly. But the agency chose not to do so, with the word “security” never appearing in the complaint. [tweeted](https://twitter.com/JohnReedStark/status/1602664347729379331). To those platforms that don’t comply with our securities laws, the SEC’s Enforcement Division is ready to take action.” The Commodity Futures Trading Commission (CFTC), which Bankman-Fried (nicknamed “SBF”) had once lobbied to regulate FTX and the crypto industry, followed suit with allegations of its own. Early Tuesday, the SEC appeared to go on the offensive. “I don’t see them as having much of a ripple effect on other parts of the industry.” [arresting him in the Bahamas on Monday night](https://time.com/6240579/ftx-sam-bankman-fried-arrested-bahamas/) as part of an eight-count indictment that includes wire fraud, securities fraud, and money laundering. The Securities and Exchange Commission (SEC), which regulates financial markets, filed civil charges alleging he defrauded his investors and his customers.

The now-arrested crypto king had long said he wanted Washington to wise up about the industry. That's finally happening.

To root for this sort of crackdown, and for an end to scams, isn’t to say the industry should be regulated out of existence; removing bad actors should be in everyone’s interest. [reconcile the inherent contradictions](https://www.theatlantic.com/technology/archive/2022/09/crypto-technology-government-regulation/671375/) between the tech’s anti-government, libertarian origins and the need to cooperate with existing legal systems in the U.S. SBF makes sense as a harbinger for the end of regulatory laxity in part because his case is such a gimme: Bankman-Fried appeared to Just this morning, Senators Elizabeth Warren and Roger Marshall introduced a new bipartisan bill looking to get ahead of the next SBF. Two days ago, Reuters [reported](https://www.reuters.com/markets/us/us-justice-dept-is-split-over-charging-binance-crypto-world-falters-sources-2022-12-12/) that the Justice Department was considering capping its long-running criminal investigation into Binance, the crypto firm led by the notoriously [elusive](https://www.forbes.com/sites/michaeldelcastillo/2020/10/29/leaked-tai-chi-document-reveals-binances-elaborate-scheme-to-evade-bitcoin-regulators/?sh=1fa251a2a926) billionaire Changpeng Zhao, with a spate of new charges for alleged financial crimes. And because the fall of FTX was as much a failure of policy as a failure to see what John Ray described as “old-fashioned embezzlement”—something that is, obviously, already illegal—it could inspire stricter enforcement too. [admit to all sorts of fraudulent behavior](https://twitter.com/corybates1895/status/1598475968762503168?s=20&t=LMO1JCUffavZ0HS14e08cg) during his press tour, even as he explicitly denied intentionally defrauding customers. In Congress, too, lawmakers on both sides of the aisle seem eager to nail Bankman-Fried to the wall. John Ray, the bankruptcy expert now overseeing FTX (who previously guided a dilapidated Enron through bankruptcy proceedings, in the early 2000s), testified to the profound mismanagement of the business—along with that of Alameda Research, the crypto trading firm SBF co-founded. This isn’t the first legal battle between regulators and a crypto firm, but the federal government is now engaged in what is probably the most high-profile, coordinated takedown of any crypto executive ever. Asked during a Monday-afternoon roundtable on Twitter Spaces whether he thought the prospect of returning to the U.S. In a sense, he was right—authorities didn’t even need to wait for him to make their move.

Sam Bankman-Fried was arrested, Congress is holding multiple hearings and FTX's bankruptcy case continues to work its way through court.

[should remain under seal for the moment](https://www.coindesk.com/policy/2022/11/22/ftx-bankruptcy-judge-says-creditor-information-can-be-redacted-at-least-for-now/). CoinDesk is an independent operating subsidiary of [Digital Currency Group](https://dcg.co/), which invests in [cryptocurrencies](https://dcg.co/#digital-assets-portfolio) and blockchain [startups](https://dcg.co/portfolio/). [he got arrested](https://www.coindesk.com/policy/2022/12/12/ftx-founder-sam-bankman-fried-arrested-bahamas-says/). [strict set of editorial policies](/ethics/). But if you read anything, you have to read [this incredible piece from the ground](https://www.coindesk.com/business/2022/12/13/inside-sam-bankman-frieds-first-hearing-after-his-arrest/) by Cheyenne Ligon, who attended the Bahamas hearing. There will be [a hearing](https://storage.courtlistener.com/recap/gov.uscourts.deb.188450/gov.uscourts.deb.188450.224.0.pdf) to discuss this on Dec. Where things start to get kind of odd is with the U.S. “They also claim that ‘Public dissemination of the Debtors’ customer list could give the Debtors’ competitors an unfair advantage to contact and poach those customers and would interfere with the Debtors’ ability to sell their assets and maximize value for their estates at the appropriate time.’” “The Court has indicated that proofs of claim will not be submitted anonymously. And then Forbes [published his prepared testimony](https://www.forbes.com/sites/stevenehrlich/2022/12/13/exclusive-transcript-the-full-testimony-sbf-planned-to-give-to-congress/?sh=ccc82d53c474). Attorney’s Office for the Southern District of New York that a grand jury had indicted him. Sam Bankman-Fried (SBF) will spend Christmas behind bars after a judge denied him bail.

This is CNBC's live blog covering Tuesday's hearing on the collapse of cryptocurrency exchange FTX before the House Financial Services Committee.

[Prosecutors](https://www.cnbc.com/2022/12/13/us-indicts-sam-bankman-fried-on-conspiracy-to-defraud-the-us-wire-fraud-securities-fraud-and-money-laundering.html) from the Southern District of New York unsealed eight separate charges against Bankman-Fried, including several counts of conspiracy and fraud. Bankman-Fried is a clarion call to crypto platforms that they need to come into compliance with our laws." The now arrested FTX founder gave almost $40 million toward campaigns and political action committees in the 2022 cycle, with most those funds focusing on helping Democrats, according to data from OpenSecrets. "He was scheduled to testify under oath before this committee day," Chairwoman Maxine Waters, D-Calif., said in her opening remarks. The crypto exchange collapsed after it came to light that Alameda had been using FTX customer assets to cover trading losses. The fallen CEO planned to tell lawmakers he "f*cked up," according to The majority of his contributions toward federal campaigns were directed to Democrats. 11 bankruptcy filing, which the company said on Twitter it was doing at the behest of Bahaman rules and its regulators. Prior to his company's implosion, Bankman-Fried donated almost $40 million to candidates, campaigns and political action committees in the 2022 congressional midterm elections, with most of his publicly disclosed contributions going toward Democrats. Ray told lawmakers much was still uncertain, but "what we do know is that the liquidation proceeding in the Bahamas was filed effectively hours before the chapter 11 proceeding. regulators released a slew of civil and criminal charges against the one-time billionaire. that was unsealed shortly after the hearing started.

Ray slammed former FTX execs, adding that the exchange was run by a "very small group of grossly inexperienced and unsophisticated individuals."

"We've been able to secure over $1 billion of assets to cold wallets in a secure location," Ray said. It could take months to secure all the company's assets following its downfall, Ray said. And in terms of repaying creditors, that could take much longer. When Ray led Enron through its restructuring process as chairman and CEO almost two decades ago, he collected roughly $1.2 million on an annualized basis. [It] will take weeks if not months to secure all the assets." FTX's new chief executive officer John Ray is making $1,300 an hour working on the bankruptcy and restructuring of the failed cryptocurrency exchange, according to

John J. Ray III, appearing before Congress, accused the FTX founder of seeking to undermine its bankruptcy process by aiding Bahamas authorities in a $100 ...

‘I Have a Similar Personality to Yours.’](https://www.wsj.com/articles/xi-jinping-putin-china-russia-relations-11671030896?mod=trending_now_news_5) management and regulators](https://www.wsj.com/articles/clashes-over-ftx-bankruptcy-go-global-11670092304?mod=article_inline) and liquidators in the Bahamas over control of FTX systems and an unknown amount of cryptocurrency assets. House Committee on Financial Services hearing](https://www.wsj.com/articles/new-ftx-chief-to-testify-before-congress-after-sam-bankman-fried-arrest-11670903625?mod=article_inline) Tuesday on FTX’s failure and his efforts to recover customers’ funds. [Walmart coupon: $20 off your $50+ order](https://www.wsj.com/coupons/walmart) [Kohl's Coupon 30% off sitewide](https://www.wsj.com/coupons/kohls) [Up to 15% off + free shipping at Wayfair](https://www.wsj.com/coupons/wayfair)

FTX Digital Markets co-CEO alerted the securities regulator in the Bahamas to the fraud being committed at the exchange, telling the authorities that FTX ...

Attorney’s Office, leading some to believe she may have been cutting a deal with authorities in the wake of the FTX collapse. 9 that FTX was According to Bahamian court records filed on Dec.

Lawmakers across both major parties criticized FTX and Bankman-Fried but disagreed about the overall crypto industry.

"A ban on crypto would be the most straightforward way of protecting both investors and the financial system," she said. "We shouldn't lose sight of the fact that millions of dollars disappeared overnight," she said. Roger Marshall, R-Ky., on Wednesday aims to address the use of cryptocurrency for illicit activities by applying a current set of anti-money laundering rules to digital currency, including Know Your Customer requirements -- rules that require banks and other financial institutions to understand the profile of and risks posed by a customer. "FTX and cryptocurrencies are not the same thing." 8, 2023, to the Bahamas Department of Corrections. "While all the facts have not yet come to light, we've clearly witnessed wrongdoing that was almost certainly illegal." "The myth of Sam Bankman-Fried and his crypto trading success was supposed to impress us," Sherrod Brown, D-Ohio, said. Now he's the villain." "Mr. Lawmakers on the chamber's banking committee differed significantly, however, on whether FTX exemplified wider industry dangers or merely a run-of-the-mill fraud that could occur at any business. He will be remanded until Feb. "We owe it to each customer to get to the bottom of the FTX implosion," Toomey said.