SEC, CFTC Asked to Wait Until Criminal Case Against Against SBF Is Resolved

Investing

Published: February 7, 2023 10:31 pm

This Tuesday, US prosecutors asked that SEC’s and CFTC’s civil cases be postponed until the criminal charges against Sam Bankman-Fried get resolved. FTX’s former CEO is facing multiple charges—both civil and criminal—for his involvement with the collapsed cryptocurrency exchange.

US Prosecutors Request the Postponement of Civil Cases Against SBF

US prosecutors requested from a judge on Tuesday, February 7th, that the civil cases against Sam Bankman-Fried brought forth by the SEC and the CFTC be postponed until the criminal case against the fallen billionaire is resolved. FTX’s former CEO is facing a number of class action lawsuits filed by the exchange’s customers and is charged with committing multiple types of fraud by US financial watchdogs, and by the Department of Justice.

The charges filed by the DoJ represent an impressive list and include conspiracy to commit money laundering, conspiracy to commit commodities fraud, conspiracy to commit securities fraud, conspiracy to commit wire fraud as well as wire fraud, and conspiracy to defraud the Federal Election Commission. Should SBF be convicted he would face a maximum sentence of 115 years in prison.

At a hearing on January 2nd, Bankman-Fried pleaded not guilty to all charges and has been released to house arrest on a $250 million bail bond. Unlike FTX’s former CEO, his close associates and executives in the FTX Group Caroline Ellison and Gary Wang pleaded guilty and agreed to cooperate with the authorities late in 2022.

Sam Bankman-Fried and the Collapse of FTX

Being the company’s co-founder and former CEO, Sam Bankman-Fried played a pivotal role in the collapse of the world’s former second-largest exchange. The multi-billion dollar catastrophe unfolded in just over a week last November between CoinDesk’s now-famous expose on Alameda Research’s holdings and FTX’s bankruptcy filing.

The bankruptcy swiftly revealed an array of malpractices within the company, including the fact that the company had next to no record-keeping and in some cases went out of its way to destroy records by communicating via apps that auto-delete messages. The filing also revealed a troubling misappropriation of users’ assets which were loaned to prop up the ailing Alameda Research.

After entering her plea, Caroline Ellison confirmed to a judge that Alemeda Researched—at Bankman-Fried’s behest—helped facilitate and obfuscate from customers numerous loans to FTX’s executives worth billions of dollars. FTX’s new CEO—who previously oversaw the bankruptcy of Enron—hired forensic investigators to track down missing funds and achieved at least some success as evidenced by his team reporting they located more than $5 billion by late January.

This article originally appeared on The Tokenist

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