FTX Founder Sam Bankman-Fried Faces New Criminal Charges: What It Means for Crypto Investors

Sam Bankman-Fried, the founder of crypto trading platform FTX, has been hit with four new criminal charges by federal prosecutors. This brings the total potential liability he faces in what authorities allege is a billion-dollar fraud to nine.

FTX Founder Sam Bankman Fried Faces New Criminal Charges

The new charges against the Crypto King, unsealed in a superseding indictment on Thursday, add to the already serious charges facing him.

“We are hard at work and will remain so until justice is done,” said Damian Williams, the US attorney for the Southern District of New York. Williams’ office is investigating the collapse of FTX.

Bankman-Fried was charged in December with eight counts of fraud. Thursday’s indictment added four new charges, including conspiracy to operate an unlicensed money transmitting business, conspiracy to commit bank fraud, securities fraud, and fraud in the connection of the purpose or sale of a derivative.

Prosecutors allege Bankman-Fried and others illegally misused customer accounts at the trading platform FTX to bolster sister hedge fund Alameda Research’s business operations, enrich himself, make venture investments, and try to buy influence with US politicians. Bankman-Fried is accused of raising at least $1.8 billion from investors.

The indictment alleges that the defendant well knew that FTX – which by early 2022 claimed to handle approximately $15 billion in daily trading volume on its platforms – was not focused on investor or client protection, nor was it the legitimate business that Bankman-Fried claimed it was.

Bankman-Fried, who was released on a $250 million bond and under home confinement at his parent’s Palo Alto, Calif. home, pleaded not guilty to the charges announced in December. At the time he was charged with multiple counts of conspiracy, wire fraud and conspiring to violate US campaign finance laws by making illegal political donations. Prosecutors allege that he and his parents funnelled $600,000 to various political campaigns between 2011 and 2013.

Bankman-Fried, Gary Wang and Caroline Ellison will be arraigned on the new charges at a future date. They now face a maximum of 155 years in prison, if convicted on all counts. Two of his top lieutenants have pleaded guilty to numerous charges and are cooperating with investigators.

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