Ex-FTX CEO Sam Bankman-Fried was found and arrested in the Bahamas on Monday night after U.S. prosecutors filed 8 counts of fraud and conspiracy against him.
The indictment was brought by the U.S. Attorney’s office for the Southern District of New York after Bankman-Fried allegedly misappropriated the funds of over 5 million people. FTX was under fire after at least $10 billion in customer funds were transferred to his trading firm, Alameda Research and an estimated $2 billion has gone missing.
He is also being charged with defrauding the U.S. and violating a number of campaign finance rules and aligning himself with other politicians and making illegal contributions to campaigns.
Often compared to George Soros and being the 2nd largest donor to the Democratic party, Bankman-Fried donated $6 million to the House Majority PAC, which advocates for Democrat control in the House of Representatives in 2022. He also contributed over $200,000 to the Democratic Congressional Campaign Committee in June.
The connection and fraud were very close to home.
Ex-Congressional candidate Michelle Bond’s live-in-boyfriend, Ryan Salame, is the co-CEO of FTX, and is also a very good friend of Bankman-Fried— Bond kept the association under wraps.
Mark Cohen is a lawyer for Bankman-Fried, and in a statement, he said his client “is reviewing the charges with his legal team and considering all of his legal options.”
U.S. prosecutors aren’t the only ones after Bankman-Fried.
On Tuesday, the Securities and Exchange Commission and the Commodity Futures Trading Commission sued Bankman-Fried for fraud.
In the lawsuit, the SEC alleged that from the start of FTX, Bankman-Fried misappropriated customer funds to support and lessen the debts of his hedge fund, Alameda Research, and made large real-estate purchases and political donations.
Between the arrest and the crypto scandal, FTX, which is one of the largest crypto exchange companies in the world, filed for bankruptcy last month, according to The Washington Post.
John J. Ray III has stepped up as the new chief executive of FTX. At a congressional hearing on Tuesday, he said FTX has losses that exceed nearly $7 billion.
Ray classified FTX’s situation as “old-fashioned embezzlement.”
“It’s taking money from customers and using it for your own purpose,” he added.
This is a developing story.
