A new indictment against Sam Bankman-Fried alleges that he took a number of steps that would ultimately obfuscate incriminating evidence.
In a Feb. 23 filing, U.S. prosecutors charged Bankman-Fried with bank fraud, operating an unlicensed money transmitting business, money laundering and conspiracy to defraud the Federal Election Commission (FEC) with unlawful political contributions. This takes the number of charges against the former FTX CEO to a total of 12 counts.
The 39-page document poses a series of new accusations against Bankman-Fried and calls for him to forfeit millions of dollars’ worth of assets to the government – most of which has already been seized.
In a section of the indictment titled “Bankman-Fried’s Lies During FTX’s Collapse,” prosecutors paint a detailed picture of the specific steps he took to cover his tracks.
At the time of FTX’s unravelling, Bankman-Fried directed employees to communicate via encrypted messaging application Signal, setting messages to auto-delete after brief periods of time. The prosecutors alleged that he did this, in part, to prevent the preservation of evidence that could be used against him.
In November, the general counsel of FTX.US warned employees to preserve documents because regulators were now involved, and posted in a company Slack channel that FTX would need to be shut down. Bankman-Fried allegedly deleted the general counsel’s message about FTX’s closure and continued to use Signal to communicate with his close associates. At this stage, he also deleted his own tweets about FTX’s customer assets being “fine.”
Bankman-Fried met with one of FTX’s in-house attorneys before he resigned from the exchange, to discuss potential explanations for FTX’s lending of customer funds to Alameda Research. One of these explanations included a claim that Alameda had borrowed from customers who opted into FTX’s peer-to-peer borrow/lend program.
Although both Bankman-Fried and the FTX attorney dismissed this explanation because the amount Alameda had borrowed was significantly higher than funds lent on FTX’s P2P borrow/lend service, the FTX founder went on to publicly embrace this explanation despite previously acknowledging it was unsupported by the facts.
Bankamn-Fried is set to face trial in October and currently resides in his parents’ house in Palo Alto, as per the conditions of his $250 million bail bond.