Sam Bankman-Fried is set to go on trial on Tuesday on fraud and conspiracy charges related to the collapse of FTX, the now-bankrupt cryptocurrency exchange he founded and led.
The 31-year-old former billionaire has pleaded not guilty. Below is an explanation of the seven charges he faces.
Prosecutors say Bankman-Fried embezzled customer money to plug losses at Alameda Research, a crypto hedge fund he owned, as well as to make investments, buy real estate in the Bahamas, and donate to U.S. political campaigns – sometimes through “straw” donors used to mask the true source of the funds.
He faces one count of wire fraud, two counts of conspiracy to commit fraud, and one count of money laundering conspiracy over the alleged theft of customer funds.
LYING TO INVESTORS AND LENDERS
Prosecutors say Bankman-Fried hid the fact Alameda had borrowed large sums of money from FTX from the exchange’s auditors and used the resulting inaccurate financial statements they produced to reassure investors about his company’s risk management.
Bankman-Fried is also accused of directing former Alameda chief executive officer Caroline Ellison to mislead the fund’s creditors about the money it had borrowed from FTX, in order to convince them not to recall their loans. Ellison has pleaded guilty and is expected to testify at trial.
Bankman-Fried faces one wire fraud count and two conspiracy counts over the alleged misrepresentations to investors and lenders.
