On Tuesday morning, a federal court in the Southern District of New York unsealed the criminal charges against Sam Bankman-Fried, the founder and former CEO of the cryptocurrency exchange FTX, revealing a wide-ranging series of charges against the disgraced former billionaire.
The complaint alleges that Bankman-Fried “willfully and knowingly” deceived and defrauded both FTX customers and lenders to fuel his crypto hedge fund, Alameda Research, by misappropriating FTX customer deposits to “pay expenses and debts of Alameda Research” and providing “materially false information” information about Alameda’s financial condition to investors.
The complaint alleges Bankman-Fried conspired to commit wire fraud against customers from the start. He also stands accused of securities fraud, money laundering, commodities fraud, and violating U.S. campaign finance laws, as well as conspiracy charges. Bankman-Fried was arrested in the Bahamas on Monday at the behest of U.S. prosecutors.
The entire indictment is embedded below.
The charges hinge on the idea that FTX was acting as a sort of slush fund for Alameda Research, and people were enticed to send money to the scheme by "false and fraudulent pretenses, representations and promises" over various communication media. FTX was well-known for its celebrity-driven advertising, including a Super Bowl ad starring Larry David, and splashy stunts like buying the naming rights to FTX Arena in Miami.
U.S. prosecutors allege that Bankman-Fried and others knowingly laundered the proceeds of their alleged crimes on FTX. In addition, prosecutors allege that they "did knowingly and willfully make contributions to candidates for federal office, joint fundraising committees, and independent expenditure committees in the names of other persons" in excess of $25,000.
Bankman-Fried and other FTX executives are known to have discussed wire fraud—the charge he is now facing—in joking terms. Top executives reportedly had a Signal chat called "wire fraud," and Alameda Research CEO Caroline Ellison stated in a now-deleted Tumblr post, "How do I signal my genuinely sweet and feminine nature on my dating profile? Should it go before or after the section on wire fraud."
In a prescient post, Ellison wrote, of U.S. regulations in emerging areas such as crypto, "they are studying X closely and in another year they will emerge with a case against a bunch of people doing X because obviously X falls under some definition of wire fraud or something."
Prosecutors are ordering Bankman-Fried to forfeit any property or cash that can be traced to his alleged crimes, and if it cannot be recovered, they vow to come after anything else he has that can match the amount.
This article was updated with additional information.