Sam Bankman-Fried wanted to block bankruptcy in FTX’s final days, the Justice Department said. Prosecutors said the crypto mogul wanted to transfer FTX assets out of the country to get better treatment from foreign regulators. They also claimed that Bankman-Fried tampered with FTX assets in the days leading up to its bankruptcy. Something is loading.
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According to the Justice Department, Sam Bankman-Fried hoped to regain control of his fallen crypto exchange by transferring assets from FTX to other regulators he hoped would spare him.
In a Monday court filing, the Justice Department claimed that Bankman-Fried tried to postpone FTX’s bankruptcy proceedings to late 2022 in order to transfer funds from the former crypto exchange to the jurisdiction of regulators. other countries. Prosecutors alleged that the disgraced crypto executive was hoping for better treatment from foreign regulators, which could potentially allow him to regain control of FTX, according to the filing.
Bankman-Fried previously said he regretted FTX’s decision to file for bankruptcy in November last year, shortly after the crypto exchange suffered “significant” liquidity issues and halted withdrawals. client. The bankruptcy filing ousted Bankman-Fried from the company’s leadership and exposed numerous accounting scandals within the exchange, such as client deposits mixed with Alameda Research, the crypto trading arm of Bankman-Fried. .
But the former crypto chief denied the misuse of client funds and criticized FTX’s new management. He also argued that parts of FTX are still solvent, despite the lack of record keeping and the exchange’s chaotic balance sheet.
Prosecutors also claim that although the crypto exchange froze customer withdrawals at the end of 2022, Bankman-Fried unfroze accounts in the Bahamas and allowed millions of customer withdrawals, to show gratitude to the island nation. where FTX was headquartered.
“We are deeply grateful for what the Bahamas has done for us and are deeply committed to it,” Bankman-Fried wrote in a letter to the Attorney General of the Bahamas at the time. “We are also deeply sorry for this mess.”
Bankman-Fried and FTX co-founder Gary Wang also allegedly took control of $546 million in Robinhood stock last year, which prosecutors say was purchased illegally with funds from Alameda. The purchase was an attempt to cover up the misuse of FTX client funds, the filing adds. More than $450 million worth of shares have been seized by the Department of Justice.