On Thursday, prosecutors added four additional criminal charges on disgraced FTX founder Sam Bankman-Fried, in a superseding indictment. The new counts were unsealed in Manhattan federal court and allege that Bankman-Fried used customers’ funds in speculative venture investments and to gain political favors across party lines so that laws favoring FTX or cryptocurrency regulations might be passed.
The new charges are conspiracy to commit wire fraud, operate an unlicensed money transmitter, make unlawful political contributions and defraud the Federal Election Commission. The indictment states that Bankman-Fried preferred not to be seen as “left-leaning partisan” and that contributions to Republicans were “dark” and were made by co-conspirators.
The 30-year-old, who is out on bond at his parents’ home in Palo Alto, California, is now facing 12 criminal counts. He pleaded not guilty to the first eight. These charges can add up to 40 extra years in prison, if he is indicted.
One of the claims by the prosecutors is that he knowingly created a company called North Dimension that neither had employees nor did it have business operations. An unnamed bank had reportedly rejected Sam Bankman-Fried’s request for the opening of a bank account. So, the fake company was created for the sole purpose of opening a bank account for trading purposes.
Bankman-Fried also reportedly donated more than the limit set for corporations, which is $25,000, to candidates. The excess amounts were donated “in the names of other persons”, according to the filing.
These new indictments show a firm resolve by federal prosecutors to strongly crackdown on crypto assets and cryptocurrency that has not faced regulations. Agencies such as the Securities and Exchange Commission (SEC), the Commodity Futures Trading Commission (CFTC) and the Treasury Department are working on clearer rules to prevent such massive frauds in future.
Federal prosecutors have said that Sam Bankman-Fried used billions of dollars from customers and investors to perpetuate one of the “biggest financial frauds in history.” They also said that the number of victims who suffered financial losses due to this fraud could exceed one million.
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