As the world grapples with the news of the largest single bankruptcy ever, its CEO and founder, Sam Bankman-Fried, is arrested just a week before Christmas. On Monday, December 13, Sam was arrested by Bahamian authorities and taken into custody, surrounded by SWAT teams and heavily armed security.
During Sam Bankman-Fried’s hearing the next day, Sam and his legal team requested that he be allowed out on bail for the whopping sum of $250,000—unfortunately, due to the global notoriety of the case, the judge denied bail and ordered SBF to remain in Bahamian custody until his court hearing in early January.
In all, there are three federal bodies indicting Sam Bankman-Fried, totaling more than 100 years in prison if convicted on all counts. At the time of writing, the following bodies are pressing charges against the 30-year-old former CEO: the Department of Justice, the Securities Exchange Commission, and the Commodity Futures Trading Commission.
SEC Was the First to Charge Bankman-Fried
The SEC was the first to announce charges against Bankman-Fried on Tuesday, Dec. 14. The SEC charged the former FTX chief with two counts of civil securities fraud. The government accused Bankman-Fried of violating the antifraud provisions of the Securities Exchange Acts of 1933 and 1934.
“We allege that Sam Bankman-Fried built a house of cards on a foundation of deception while telling investors that it was one of the safest buildings in crypto,” SEC Chairman Gary Gensler wrote in a statement.
If found liable, Bankman-Fried would likely be barred from serving as an officer of a publicly traded company and banned from issuing trading securities outside of personal use. Additionally, he could be liable for civil penalties.
How Many Charges is Bankman-Fried Facing?
The Commodity Futures Trading Commission, the country’s top derivates regulator, charged Bankman-Fried and FTX with two counts of violating the antifraud provisions of the Commodity Exchange Act. The Commission charged Bankman-Fried with one count of fraud and one count of “fraudulent misstatements” to customers. The CFTC has not yet released a statement on the charges.
Going across the Hudson River, the Department of Justice, US Attorney Damian Williams has brought a litany of criminal charges against Bankman-Fried, including the following:
- 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 commodities fraud
- Securities fraud
- Money laundering
- Conspiracy to defraud the United States and violate the campaign finance law
“FTX Group’s collapse appears to stem from the absolute concentration of control in the hands of a very small group of grossly inexperienced and unsophisticated individuals.” – John J. Ray III
What Does the Future Hold for Bankman-Fried?
Does Sam Bankman-Fried deserve to spend the rest of his life behind bars for mismanagement of investor funds? In comparison, no banker went to jail or experienced any backlash from the government during the 2008 financial collapse.
Is the United States Government making an example out of Sam Bankman-Fried? Or is this attack more geared towards the wild Wild West of crypto? And will anyone step into to save SBF from the grips of the United States federal government?
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