FTX: Charges Pinned Against Sam Bankman-Fried Explained

Paigambar Mohan Raj
Source: Bitcoin.com

Yesterday, Sam Bankman-Fried (SBF), founder of the now defunct crypto exchange FTX, was arrested in the Bahamas. However, some questioned why the 30-year-old was not allowed to testify before being arrested. Nonetheless, many are hopeful that justice will finally be served to those who were wronged.

SBF has eight charges against him, and he could go to prison for 115 years if convicted for all counts. Moreover, it is unclear if other FTX executives will face trial. With that in mind, let us dive into the eight charges SBF is currently facing.

Charges against the FTX founder

Conspiracy to commit wire fraud on customers and lenders: Wire fraud has a maximum sentence of 20 years. According to reports, the exchange’s inner circle was part of a group chat on Signal called “Wirefraud.” According to the report, Signal was the chosen platform in the hopes that the information would remain hidden.

Conspiracy by misusing customer funds: One of the crimes committed by the exchanges was misappropriating customer funds. Additionally, the relationship between FTX and Alameda Research and the use of FTX funds by Alameda has been put into question.

Money laundering: Anyone found guilty of money laundering faces fines of up to $500,000 or double the value of the property involved in the transaction, whichever is higher. Moreover, there could be a sentence of up to 20 years in prison.

Violations of campaign finance laws: In what could be the biggest flood of unlawful corporate money into US politics in decades, SBF is also accused of breaking campaign finance regulations. According to the prosecution, the donations were an attempt to shape laws around the crypto space to SBF’s benefit.

Securities fraud: The act of buying or selling a security using manipulative or deceitful methods is known as securities fraud. Moreover, securities fraud can land a person 25 years, along with a fine.

Orchestrating a scheme to defraud equity investors: According to the SEC, the FTX founder created a scheme to siphon clients’ deposits from FTX.com.

Commingled FTX customers’ funds at Alameda to make undisclosed venture investments: According to the complaint, SBF secretly transferred consumer assets to his privately held cryptocurrency fund, Alameda Research LLC, without their knowledge.

And lastly,

Violating the anti-fraud provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934.