The disgraced crypto entrepreneur Sam Bankman-Fried could face up to 115 years in prison if convicted of all counts on the eight charges put forward by Department of Justice Officials, it was announced Wednesday.
Three separate law enforcement agencies (the Federal Bureau of Investigation, the Securities Exchange Commission, and the Commodity Futures Trading Commission) confirmed that had been working “around the clock” to unravel what happened in “one of the biggest financial frauds in American history,” Manhattan US Attorney Damian Williams said during a press conference.
“Fraud is fraud,” added FBI New York Assistant Director in Charge Michael Driscoll. “It does not matter the complexity of the investment scheme, it does not matter the amount of money involved.”
The charges also come just hours after a separate filing from the Securities and Exchange Commission (SEC) unveiled similar charges against Bankman-Fried.
“Bankman-Fried raised more than $1.8 billion from investors … who bought an equity stake in FTX believing that FTX had appropriate controls and risk management measures,” the SEC alleges. “Unbeknownst to those investors (and FTX’s trading customers), Bankman-Fried was orchestrating a massive, years-long fraud, diverting billions of dollars of the trading platform’s customer funds for his own personal benefit and to help grow his crypto empire.”
The potential sentence comes after Bankman-Fried was arrested by authorities in the Bahamas, where he resides, late Tuesday evening. The FTX founder faces charges of misusing billions of dollars in customer money to prop up his Alameda Research crypto fund and using aliases to influence U.S. public policy via generous donations to political campaigns.
Bankman-Fried also faces two counts of wire fraud, two of wire fraud conspiracy and money-laundering charges, all of which individually carry a maximum sentence of 20 years.
However, it is understood that Bankman-Fried is unlikely to face a sentence of that length, although his eventual term if convicted may still span decades.
Bankman-Fried was scheduled to testify today before a House of Representatives committee, although that appearance has now been canceled. He will now face extradition from the Bahamas to the United States, although it is unclear how long that process will take.