Who is Sam Bankman Fried?
Samuel Benjamin Bankman-Fried  also goes by his initials as SBF, is an American suspected fraudster, entrepreneur, investor, and a former billionaire.  “Bankman-Fried was the CEO of the cryptocurrency exchange FTX and cryptocurrency trading firm Alameda Research. FTX experienced a crisis in late 2022, which led to a collapse in FTX’s native cryptocurrency, FTT. Amid the crisis, Bankman-Fried announced he would wind down operations at Alameda Research and resigned as CEO of FTX, which filed for Chapter 11 bankruptcy.” 
Prior to FTX’s collapse, Bankman-Fried was ranked the 41st richest American in the Forbes 400, and the 60th richest person in world by The World’s Billionaires.  His net worth peaked at $26 billion. In October 2022, he had an estimated net worth of $10.5 billion.  By November 8, 2022, amid the bankruptcy of FTX, his net worth was estimated to have dropped 94 percent in a day to $991.5 million according to the Bloomberg Billionaires Index, the largest one-day drop in the index’s history.  On November 11, 2022, the Bloomberg Billionaires Index considered Bankman-Fried to have no material wealth. 
On December 12, 2022, Bankman-Fried was arrested in the Bahamas, pending potential extradition to the United States (). An indictment of him before the U.S. District Court for the Southern District of New York was unsealed on December 13, revealing a range of charges for offenses, including wire fraud, commodities fraud, securities fraud, money laundering, and campaign finance law violations.() Bankman-Fried faces up to 115 years in prison if convicted on all eight counts.() On December 22, Bankman-Fried was released on a $250 million bond, on the condition that he reside at his parents’ home in California. ()
“NEW YORK, Jan 3 (Reuters) – Sam Bankman-Fried pleaded not guilty on Tuesday to criminal charges that he cheated investors in his now-bankrupt FTX cryptocurrency exchange and caused billions of dollars in losses, in what prosecutors have called an “epic” fraud. He entered his plea in Manhattan federal court where he faces eight criminal counts, including wire fraud and money laundering conspiracy. The 30-year-old ex-mogul is accused of looting FTX customers’ deposits to support his Alameda Research hedge fund, buy real estate and donate millions of dollars to political causes.”
The Securities and Exchange Commission on December 13, 2022, charged Samuel Benjamin with swindling investors in a crypto trading platform (called the FTX) of which he was the CEO. There have been countless securities law violations. The investigation is still carrying on other alleged allegations against Samuel Benjamin relating to the default. “According to the SEC’s complaint, since at least May 2019, FTX, based in The Bahamas, raised more than $1.8 billion from equity investors, including approximately $1.1 billion from approximately 90 U.S.-based investors. In his representations to investors, Bankman-Fried promoted FTX as a safe, responsible crypto asset trading platform, specifically touting FTX’s sophisticated, automated risk measures to protect customer assets. 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.”
“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,” said SEC Chair Gary Gensler. “The alleged fraud committed by Mr. Bankman-Fried is a clarion call to crypto platforms that they need to come into compliance with our laws. Compliance protects both those who invest on and those who invest in crypto platforms with time-tested safeguards, such as properly protecting customer funds and separating conflicting lines of business. It also shines a light into trading platform conduct for both investors through disclosure and regulators through examination authority. To those platforms that don’t comply with our securities laws, the SEC’s Enforcement Division is ready to take action.”
“FTX operated behind a veneer of legitimacy Mr. Bankman-Fried created by, among other things, touting its best-in-class controls, including a proprietary ‘risk engine,’ and FTX’s adherence to specific investor protection principles and detailed terms of service. But as we allege in our complaint, that veneer wasn’t just thin, it was fraudulent,” said Gurbir S. Grewal, Director of the SEC’s Division of Enforcement. “FTX’s collapse highlights the very real risks that unregistered crypto asset trading platforms can pose for investors and customers alike. While we continue to investigate FTX and other entities and individuals for potential violations of the federal securities laws, as alleged in our complaint, today we are holding Mr. Bankman-Fried responsible for fraudulently raising billions of dollars from investors in FTX and misusing funds belonging to FTX’s trading customers.”
The charges imposed by the SEC mention violation of:
- Anti-Fraud Provisions,
- Securities Act of 1993, and
- Securities Exchange Act of 1934.
The SEC’s complaint seeks injunctions against future securities law violations; an injunction that prohibits Bankman-Fried from participating in the issuance, purchase, offer, or sale of any securities, except for his own personal account; disgorgement of his ill-gotten gains; a civil penalty; and an officer and director bar.
 Sharwood, Simon. "Crypto villain Sam Bankman-Fried arrested in Bahamas". The Register. Archived from the original on January 5, 2023.  Turner, Matt; Rosen, Phil; Erb, Jordan Parker (December 19, 2021). "Sam Bankman-Fried went from relative obscurity to crypto billionaire in just 4 years. Insiders explain how he did it, and what's next". Business Insider. Archived from the original on November 11, 2022.  Sam Bankman-Fried - Wikipedia  Ibid.  "Sam Bankman-Fried". Forbes. Archived from the original on December 30, 2022.  "Sam Bankman-Fried's $16 Billion Fortune Is Eviscerated in Days". Bloomberg News. November 8, 2022. Archived from the original on November 16, 2022.  Kulish, Nicholas (October 8, 2022). "How a Scottish Moral Philosopher Got Elon Musk's Number". The New York Times. ISSN 0362-4331. Archived from the original on November 16, 2022.  "Crypto's golden boy Sam Bankman-Fried sees $14.6 billion wiped from his personal wealth overnight after agreeing FTX bailout deal". Fortune. Archived from the original on November 15, 2022.  "Bankman-Fried's 'Effective Altruism' Implodes With His Fortunes". Bloomberg News. November 11, 2022. Archived from the original on November 17, 2022.  Betz, Bradford (December 12, 2022). "FTX founder Sam Bankman-Fried arrested in Bahamas, US expected to request extradition, authorities say". FOXBusiness. Archived from the original on December 12, 2022.  Department of Justice, Office of Public Affairs (December 13, 2022). "FTX Founder Indicted for Fraud, Money Laundering, and Campaign Finance Offenses". Archived from the original on December 28, 2022.  Egan, Matt; Morrow, Allison (December 13, 2022). "FTX founder indicted on eight criminal charges including fraud and conspiracy". CNN Business. Archived from the original on December 13, 2022.  Weiser, Benjamin; Goldstein, Matthew; Yaffe-Bellany, David (December 22, 2022). "Sam Bankman-Fried to Be Released on $250 Million Bond With Restrictive Terms". The New York Times. Archived from the original on January 12, 2023.  Sam Bankman-Fried pleads not guilty in FTX fraud case; October trial set | Reuters  SEC.gov | SEC Charges Samuel Bankman-Fried with Defrauding Investors in Crypto Asset Trading Platform FTX  Ibid.  Supra 15.
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