In a recent twist of events, crypto mogul giant Sam Bankman-Fried has been accused of fraud by Washington State prosecutors. Bankman-Fried is the founder and CEO of FTX, a global cryptocurrency derivatives broker, and the owner of Alameda Research, a quantitative cryptocurrency market maker.
The allegations of fraud were first reported by The Seattle Times on Jan. 11, 2021, after they investigated the case. The accusations stem from Bankman-Fried’s former employer, Coinlab, where he worked as CEO between 2017 and 2019. According to prosecutors, Bankman-Fried had an agreement with Coinlab to turn over customer accounts and customer funds to Coinlab after the company was acquired by a major startup. However, Bankman-Fried apparently failed to follow through with this agreement, and instead moved customers and funds to another entity he was connected to, called FTX.
Sam Bankman-Fried has since denied the allegations. He has stated that it was never his intention to defraud Coinlab in any way. He also claims that he had an amicable relationship with Coinlab after the acquisition and that all decisions made were done with the company’s interest in mind.
Nevertheless, Washington state prosecutors have not dropped the charges. The complaint against Bankman-Fried includes accusations of theft, money laundering, and violation of Washington’s consumer protection law. If convicted, Bankman-Fried could face jail time and be fined up to $40,000.
The case against Bankman-Fried is still pending, and it will be interesting to see the outcome of these recent allegations. His current company, FTX, is still thriving and is one of the largest crypto derivatives exchanges in the world. It will be interesting to see if the case causes any disruption to the business. It is yet another reminder of the importance of adhering to the regulations that apply to the crypto world, and the consequences of failing to do so.