Sam Bankman-Fried, ex-rising star of cryptocurrencies with his FTX platform and his company Alameda, was indicted on Tuesday by American justice for having defrauded his customers and investors.
Arrested Monday in the Bahamas at the request of the United States, he is charged with a total of eight counts, including electronic fraud, money laundering and violation of electoral laws, according to the indictment unveiled by the federal prosecutor of New York.
Also prosecuted by financial market regulators, he appeared before a judge in the Bahamas on Tuesday, according to local media.
Mr. Bankman-Fried is accused of having, from the beginning of FTX in 2019, used the money deposited by customers wishing to speculate on cryptocurrencies to finance the activity – and the risky bets – of his brokerage and investment company. Alameda investment.
He is also accused of having lied to investors lending money to Alameda about the real financial health of the company.
He “built a house of cards based on deception,” said the chairman of the authority responsible for regulating Wall Street, the SEC, Gary Gensler, in a press release.
The stock market policeman accuses him of having lied to investors, from whom he raised more than 1.8 billion dollars for FTX, about the links between the two companies and of having used his clients’ money to make ” risky investments, lavish real estate purchases and large political donations”.
The US agency in charge of derivatives (CFTC) has also filed a complaint accusing the entrepreneur of fraud and misrepresentation.
The United States “will probably seek his extradition,” Bahamas Attorney General Ryan Pinder said in a statement posted on Twitter. The Bahamas is conducting its own criminal investigation into the FTX collapse.
“Total Failure”
The platform was however valued at $32 billion at the start of the year.
“SBF”, as he is nicknamed, had recruited many celebrities to promote it and met regularly with regulators in Washington.
But in early November, doubts began to surface about FTX’s ties to Alameda, and many customers sought their money back. Suddenly no longer able to pay back to its customers the money they had deposited there, the group announced its bankruptcy filing on 11 November.
The collapse of FTX has tripped up several companies in the cryptocurrency industry and prompted many officials to call for increased regulation.
In the United States, “if he is convicted of fraud, he could spend the rest of his life in prison, given the amount”, estimates Jacob Frenkel, of the firm Dickinson Wright.
“There would be no indictment if the prosecutors were not absolutely convinced that they will obtain a conviction,” added this specialist in federal investigations, who worked for the American stock market policeman (SEC).
Sam Bankman-Fried was supposed to speak before a House of Representatives committee on Tuesday, as was John Ray, the new boss of FTX.
The ex-leaders of the bankrupt platform have shown a “complete failure” at all levels of control, the latter told Congress, deploring in particular the “total absence” of accounting or an independent board of directors. for a company that was brewing billions of dollars.
At first glance, “the collapse of the FTX group appears to be the result of the absolute concentration of control in the hands of a very small group of grossly inexperienced and unsophisticated individuals,” the official said.
Despite the seriousness of the charges against him, the former crypto star, with a fortune estimated at $ 25 billion, had nevertheless chosen to multiply interviews and speeches on Twitter in recent weeks.
A graduate of the Massachusetts Institute of Technology, the son of law professors at Stanford University, he had managed to legitimize cryptocurrencies with the general public and the political class.
But his contrite air and his hesitant tone during his recent speeches offer a striking contrast to the reassuring image he has forged for himself in recent years.
“It was a very risky strategy,” remarks Jacob Frenkel. In the end, it is “as if he had admitted that he behaved in a criminal way”.