Sam Bankman-Fried gets fresh indictment including bank fraud charges

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As if things weren’t already bad enough for disgraced FTX CEO Sam Bankman-Fried, a fresh indictment unveiled Thursday morning brought new charges against him, including bank fraud and operating an unlicensed money transmitter.

The indictment also brought a modified campaign finance law violation, specifically conspiracy to make unlawful political contributions, due to his use of ‘straw donors’ to exceed contribution limits.

In a list of accusations that would make Bernie Madoff blush, Bankman-Fried already faced eight charges, including conspiracy to commit wire fraud on customers, wire fraud on customers, conspiracy to commit wire fraud on lenders, wire fraud on lenders, conspiracy to commit securities fraud, conspiracy to commit commodities fraud, conspiracy to commit money laundering, and conspiracy to defraud the U.S. and violate campaign finance laws.

That’s quite a list of charges for the one-time ‘altruist’ who was once the hero of the cryptocurrency industry.

What led to the new charges? When attempting to open a bank account, Bankman-Fried allegedly “falsely represented to a financial institution that the account would be used for trading and market making” when, in reality, it was used to transmit and receive customer funds. The elaborate deception saw Bankman-Fried go as far as to open a company called ‘North Dimension’ to bolster the story he was trying to tell.

The document also called on ‘SBF’ to hand over hundreds of millions of dollars worth of assets, many of which are already in Uncle Sam’s possession. These assets include approximately $550 million worth of Robinhood (NASDAQ: HOOD) shares and $140 million in cash held at banks including Silvergate (NASDAQ: SI) and Farmington State.

FTX executives plead guilty while Bankman-Fried maintains innocence

The new charges are no surprise to anyone who has followed the story arc of Sam Bankman-Fried closely. CoinGeek called him out long before his empire of lies came crashing down, and it was obvious when the first charges were brought that there was much more to the story.

Yet, despite Gary Wang and Caroline Ellison pleading guilty to fraud, Bankman-Fried has maintained his innocence, chalking it all up to confusion about which bank accounts were which.

🚨 BREAKING: Caroline Ellison & Gary Wang have plead guilty to fraud & are cooperating with prosecutors.

— Tiffany Fong (@TiffanyFong_) December 22, 2022

Could other FTX higher-ups be guilty (and admit it) while the wunderkind himself is innocent? Unlikely! It’s just another example of Bankman-Fried’s loose relationship with the truth. In any case, all will come to light in October when he goes on trial.

‘Crypto’ is riddled with criminality, and it’s all coming out

As the walls close in and regulators/law enforcement begin making arrests, ordering shutdowns, and bringing the net in on the Crypto Crime Cartel, expect more stories like the FTX saga to follow.

To give but a few examples of the dishonesty and criminality at the heart of the industry, in just the last year, we’ve seen Three Arrows Capital (3AC) accused of borrowing hundreds of millions in bad faith, Celsius Network CEO Alex Mashinsky accused of fraud by New York State, and the Department of Justice reinvigorating its bank fraud investigation into Tether executives.

Truthfully, this is only the tip of the iceberg, and there’s much more to come. Users who hold digital currencies would be well advised to sell them, and those who hold substantial amounts on centralized exchanges should act immediately to either move the coins to an offline wallet or cash out while there’s still liquidity to do so.

Follow CoinGeek’s Crypto Crime Cartel series, which delves into the stream of groups—from BitMEX to Binance, Bitcoin.com, Blockstream, ShapeShift, Coinbase, Ripple,
Ethereum, FTX and Tether—who have co-opted the digital asset revolution and turned the industry into a minefield for naïve (and even experienced) players in the market.