Bankman-Fried fraud charges detail FTX’s lack of internal controls, risk management protocols

Sam Bankman-Fried

A flurry of criminal and civil fraud charges laid against FTX founder Sam Bankman-Fried have pulled back the veil on the cryptocurrency exchange’s complete lack of internal controls and toothless risk management procedures.

Bankman-Fried was arrested Monday in the Bahamas, just as he was preparing to testify before the House Committee on Financial Services about why FTX, once valued at $32 billion, collapsed and filed for bankruptcy in November.

The Department of Justice (DOJ) unveiled an eight-count indictment Tuesday from a federal grand jury for the U.S. District Court for the Southern District of New York against Bankman-Fried. The FTX founder is charged with conspiracy to commit wire fraud, wire fraud, conspiracy to commit commodities fraud, conspiracy to commit securities fraud, conspiracy to commit money laundering, and conspiracy to defraud the Federal Election Commission and commit campaign finance violations. Five of the charges each carry a maximum sentence of 20 years in prison; three others carry a maximum sentence of five years each.

lock iconTHIS IS MEMBERS-ONLY CONTENT. To continue reading, choose one of the options below.