A superseding indictment against Sam Bankman-Fried (SBF) has been filed in the Southern District of New York (SDNY), newly charging him with conspiracy to commit bank fraud, conspiracy to operate an unlicensed money-transmitting business, commodities fraud, and securities fraud.
This is an addition to the existing conspiracy to commit money laundering, conspiracy to make unlawful political contributions, wire fraud, and conspiracy charges.
The indictment describes how Bankman-Fried allegedly stole FTX customer deposits to support the operations and investments of FTX and Alameda and to fund speculative venture investments. It also claims he used the funds to enrich himself and to try to purchase influence over cryptocurrency regulation.
This was to be done by steering tens of millions of dollars of illegal campaign contributions to both Democrats and Republicans.
The document also describes how SBF used Alameda-controlled bank accounts to provide deposits and withdrawals for FTX customers. The banks were allegedly never informed that these accounts were being used for FTX customers.
Protos has previously reported on Alameda’s purchase of Australian over-the-counter (OTC) trading desk, HiveEx, in August 2020 and how it was used to service deposits and withdrawals for FTX.
Is Silvergate ‘Bank-1’?
SBF allegedly engaged in other schemes, including setting up an entity called North Dimension at ‘Bank-1’ that he told the bank was a trading account for Alameda but was actually being used by FTX. This came after ‘Bank-1’ (as it’s referenced in the indictment) had previously rebuffed FTX’s attempts to get a bank account, requesting it show appropriate licensure as a money transmission business first.
Users sending money to North Dimension reportedly engaged with Silvergate Bank, suggesting that it’s likely ‘Bank-1.’ Silvergate has come under increasing scrutiny for the services it provided, perhaps unwittingly, to FTX and Alameda Research, with several US Senators requesting further information.
There’s also additional information provided about SBF’s political giving, suggesting that he conspired with two other FTX executives, identified as ‘CC-1’ and ‘CC-2,’ to hide the fact that the donations were made with FTX customer deposits. He also hoped this would avoid his name being tied to either Republican or Democratic causes.
The indictment further alleges that Bankman-Fried was notified of a shortfall at FTX US on November 9, and directed Alameda Research to transfer funds in order to fill it.
Bankman-Fried pled not guilty on his previous indictment.