Edited by: TJVNews.com

The U.S. government charged Samuel Bankman-Fried, the founder and former CEO of cryptocurrency exchange FTX, with a host of financial crimes on Tuesday, alleging he intentionally deceived customers and investors to enrich himself and others, while playing a central role in the company’s multibillion-dollar collapse, as was reported by the AP.

Breitbart reported on Tuesday that according to a document unsealed by a New York court on prosecutors are charging Bankman-Fried with eight counts. They are:

• Conspiracy to Commit Wire Fraud on Customers
• Wire Fraud on Customers
• Conspiracy to Commit Wire Fraud on Lenders
• Wire Fraud on Lenders
• Conspiracy to Commit Commodities Fraud
• Conspiracy to Commit Securities Fraud
• Conspiracy to Commit Money Laundering
• Conspiracy to Defraud the United States and Violate Campaign Finance Laws

Federal prosecutors say that beginning in 2019 Bankman-Fried devised “a scheme and artifice to defraud” FTX’s customers and investors. The AP also reported that he diverted their money to cover expenses, debts and risky trades at his crypto hedge fund, Alameda Research, and to make lavish real estate purchases and large political donations, prosecutors said in a 13-page indictment.

The AP also reported that Bankman-Fried was arrested Monday in the Bahamas at the request of the U.S. government, which charged him with eight criminal violations, ranging from wire fraud to money laundering to conspiracy to commit fraud. Bankman Fried, one of the largest political donors this year, was also charged with making illegal campaign contributions.

If convicted of all the charges against him, Bankman-Fried could face decades in jail, according to Nicholas Biase, a spokesperson for U.S. prosecutors, as was reported by the AP.

He was a prominent personality in Washington, donating tens of millions of dollars toward mostly left-leaning political causes and Democratic political campaigns, though he also gave money to Republicans, the AP reported.

Before his arrest, Bankman-Fried had been holed up in his luxury compound in the Bahamas, the AP reported. U.S. authorities are expected to request his extradition to the U.S., although the timing of that request is unclear.

At a court hearing in the Bahamas on Tuesday, prosecutors argued that Bankman-Fried was a flight risk and should be held without bail, according to Our News, a broadcast news company based there, as was reported by the AP. His lawyers said he is likely to request a formal extradition hearing.

At a press conference on Tuesday, U.S. Attorney Damian Williams called it “one of the biggest frauds in American history,” and said the investigation is ongoing and fast-moving, according to the AP report. He urged anyone who believes they have been victims of the scheme to contact his office.

Bankman-Fried has fallen hard and fast from the top of the cryptocurrency industry he helped to evangelize. The AP reported that FTX filed for bankruptcy on Nov. 11, when it ran out of money after the cryptocurrency equivalent of a bank run.

Before the bankruptcy, he was considered by many in Washington and on Wall Street as a wunderkind of digital currencies, someone who could help take them mainstream, in part by working with policymakers to bring more oversight and trust to the industry, the report indicated.

He was worth tens of billions of dollars — at least on paper — and was able to attract celebrities like Tom Brady or former politicians like Tony Blair and Bill Clinton to his conferences at luxury resorts in the Bahamas, the AP reported. He was the subject of fawning profiles in media, was considered a prominent advocate for a type of charitable giving known as “effective altruism,” and commanded millions of followers on Twitter.

But since FTX’s implosion, the AP reported that Bankman-Fried and his company have been likened to other disgraced financiers and companies, such as Bernie Madoff and Enron.

The criminal indictment against Bankman-Fried and “others” at FTX is on top of civil charges announced Tuesday by the Securities and Exchange Commission and the Commodity Futures Trading Commission, the AP report indicated. The SEC alleges Bankman-Fried defrauded investors and illegally used their money to buy real estate on behalf of himself and his family.

“We allege that Sam Bankman-Fried built a house of cards on a foundation of deception while telling investors that it was one of the safest buildings in crypto,” said SEC Chair Gary Gensler, as was reported by the AP.

The SEC complaint alleges that Bankman-Fried had raised more than $1.8 billion from investors since May 2019 by promoting FTX as a safe, responsible platform for trading crypto assets, the AP reported. Instead, the complaint says, Bankman-Fried diverted customers’ funds to Alameda Research without telling them.

“He then used Alameda as his personal piggy bank to buy luxury condominiums, support political campaigns, and make private investments, among other uses,” the complaint reads. “None of this was disclosed to FTX equity investors or to the platform’s trading customers.”

Alameda did not segregate FTX investor funds and Alameda investments, the SEC said, using that money to “indiscriminately fund its trading operations,” as well as other ventures of Bankman-Fried, the AP reported.

Bankman-Fried said recently that he did not “knowingly” misuse customers’ funds, and that he believes angry customers will eventually get their money back.

“FTX operated behind a veneer of legitimacy,” said Gurbir Grewal, director of the SEC’s enforcement division, the AP reported. “That veneer wasn’t just thin, it was fraudulent.”

The collapse of FTX — which followed other cryptocurrency debacles earlier this year — is adding urgency to efforts to regulate the industry.

In November, bankruptcy documents revealed  that FTX raised some $421 million from investors, only to have Bankman-Fried siphon off $300 million as he used some of that money to fund the purchase of a $16.4 million vacation home for his parents in the Bahamas, the New York Post reported at the time.

The Wall Street Journal reported that at the time, Bankman-Fried told investors the cash-out was a partial reimbursement of money he’d spent to buy out rival Binance’s stake in FTX a few months earlier.

Reuters reported that Sam’s parents, Joseph Bankman and Barbara Fried, both Stanford University law professors, were listed as the owners of a $16.4 million beachfront vacation home in the Old Fort Bay section of the Bahamas. Reuters cited property records from the island nation.

Bankman-Fried’s parents were in the process of returning the home to FTX, according to a spokesperson, the Post reported.

U.S. authorities said they will try to claw back any of Bankman-Fried’s financial gains from the alleged scheme, according to the AP report.

“It will most likely take time, but eventually, many will recover their funds,” Derek Jacques, a bankruptcy attorney with the Mitten Law Firm near Detroit, told The Post in November. “This is assuming that no criminal penalties are doled out, which still appears to be a distinct possibility in this case.”

Blue-chip venture capital firms such as Temasek, Tiger Global were among those who extended funds to FTX in October of last year, when the company was valued at some $25 billion, the Post reported.

Those firms and others including Sequoia and the Ontario Teachers’ Pension plan plowed a total of $1.8 billion of capital into FTX, the AP reported. Paradigm, a crypto-focused investment firm, invested $215 million in FTX — the largest of any entity, as was reported by the Post.

A lawyer for Bankman-Fried, Mark S. Cohen, said Tuesday he is “reviewing the charges with his legal team and considering all of his legal options,” the AP reported.

At a congressional hearing Tuesday that was scheduled before Bankman-Fried’s arrest, the new CEO brought in to steer FTX through its bankruptcy proceedings leveled harsh criticism, according to the AP report. He said there was scant oversight of customers’ money and “very few rules” about how their funds could be used.

John Ray III called FTX’s collapse one of the worst business failures he has seen — a “paperless bankruptcy,” fueled by an “unprecedented lack of documentation.”

Ray, who took over FTX on Nov. 11, told the committee that the problems at FTX were a cumulation of months or even years of bad decisions and poor financial controls, the AP reported.

“This is not something that happened overnight or in a context of a week,” he said.

He added: “This is just plain, old-fashioned embezzlement, taking money from others and using it for your own purposes.”

When asked to elaborate by Rep. Ann Wagner, R-Mo., Ray said there was “no record-keeping whatsoever” at FTX, according to the AP report. Ray also said employees used QuickBooks, software typically used by small and medium-sized businesses, to manage FTX’s finances.

“A multibillion-dollar company using QuickBooks,” Ray said, the AP reported. At its peak, FTX’s market value topped $30 billion.

In his prepared remarks, Ray painted a picture of a company acting with little to no oversight.

“FTX Group’s collapse appears to stem from the absolute concentration of control in the hands of a very small group of grossly inexperienced and unsophisticated individuals who failed to implement virtually any of the systems or controls that are necessary for a company that is entrusted with other people’s money or assets,” Ray said, as was reported by the AP.

In an update to their story on Tuesday, Breitbart said that reporters have obtained a copy of the prepared statement that Bankman-Fried is going to deliver before Congress, according to Mediaite.

The outlet states he will say, in part: “I would like to start by formally stating, under oath: I fucked up. I know that it doesn’t mean much to say that I’m sorry. And so I’m dedicating as much of myself as I can to doing right by customers. When all is said and done, I’ll judge myself primarily by one metric: whether I have eventually been able to make customers whole. If I fail our customers in this regard, I have failed myself.”

Several crypto companies have failed this year as bitcoin and other digital currencies have collapsed in value, the AP reported.  FTX failed when it experienced the crypto equivalent of a bank run, and early investigations have found that FTX employees intermingled assets held for customers with assets they were investing.

“Trading, financing, and custody need to be different,” Belshe said, as was reported by the AP.

The assets recovered include not only bitcoin and ethereum, but also a collection of minor cryptocurrencies that vary in popularity and value, such as the shiba inu coin, according to the AP reported.

California-based BitGo has a history of recovering and securing assets. The AP reported that the company was tasked with securing assets after the cryptocurrency exchange Mt. Gox failed in 2014. It is also the custodian for the assets held by the government of El Salvador as part of that country’s experiment in using bitcoin as legal tender.

FTX is paying Bitgo a $5 million retainer and $100,000 a month for its services, as was reported by the AP.

In a recently published op-ed piece that was highly critical of Bankman Fried’s deception, political commentator and news analyst, Victor Davis Hanson wrote:

“Mysteriously, only after the conclusion of the midterm elections, did we suddenly learn that this left-wing “philanthropist” and benefactor of Democratic politics, this megadonor to the quid pro quo puff-piece media, this con artist protected from federal securities regulators, had drained off, lost, hidden, or spent billions of dollars of other people’s money.”

In his piece entitled, “Sam Bankman-Fried is the Ultimate Expression of the Most Toxic Culture in America,”  Davis Hanson added,  “How does the most sophisticated financial system in the history of civilization allow a virtue-signaling nerd to nearly wreck it? Where were the Federal Trade Commission, the Department of Justice, the IRS, and all the other alphabet soup agencies that supposedly exist so that someone like Bankman-Fried does not? Where is Merrick Garland and his special prosecutors, the FBI with its televised SWAT swoops and leg irons?”

He continued by saying: “For all the performance-art boasts of simply doing good for others by doing far better for himself, Bankman-Fried may soon be revealed to be one of the great, dissolute con artists in American history. Like the infamous Charles Ponzi, “Bankman” may become our eponymous word in the 21st century for electronically driven, pyramid-scheme theft.”

Davis Hanson also noted that, “Bankman-Fried had showered Joe Biden in 2020 with millions of dollars in campaign donations and did so again with larger sums to congressional candidates in 2022. His public relations arm of FTX exuded the usual virtue speak—including promised impending multibillion-dollar gifting—for utopian, Democratic, and progressive causes. And the media on spec gushed about their pet grunger as he sought to buy protection from Democratic fixers.”