Yesterday SBF was criminally charged in NYC by a US Attorney for The Southern District of New York. He was arrested by Bahamian Police last night without incident. Extradition proceedings to The United States are expected to begin soon.
Here's a partial cut and paste from a press release issued by The US Securities and Exchange Commission
The complaint alleges that, in reality, Bankman-Fried orchestrated a years-long fraud to conceal from FTX’s investors (1) the undisclosed diversion of FTX customers’ funds to Alameda Research LLC, his privately-held crypto hedge fund; (2) the undisclosed special treatment afforded to Alameda on the FTX platform, including providing Alameda with a virtually unlimited “line of credit” funded by the platform’s customers and exempting Alameda from certain key FTX risk mitigation measures; and (3) undisclosed risk stemming from FTX’s exposure to Alameda’s significant holdings of overvalued, illiquid assets such as FTX-affiliated tokens. The complaint further alleges that Bankman-Fried used commingled FTX customers’ funds at Alameda to make undisclosed venture investments, lavish real estate purchases, and large political donations. Commingled funds means he mixed his clients money with his own money and invested it. That's a huge no-no for any investment firm. Very illegal.
The press release goes on to say "The collapse of FTX stemmed “from the absolute concentration of control in the hands of a very small group of grossly inexperienced and unsophisticated individuals"
"The criminal charges against Mr. Bankman-Fried included wire fraud, wire fraud conspiracy, securities fraud, securities fraud conspiracy and money laundering, said a person with knowledge of the matter."
SBF was set to testify to a Congressional Panel in Washington D.C today, but obviously that will not happen. G5