ftx

FTX's SBF gets four new charges as prosecutors said they created a no-employee company to get a bank account

Unusual Whales

Feb 28, 2023 • 1 min read

Per BI

Four new charges were filed against Sam Bankman-Fried, the disgraced founder of now-bankrupt FTX. The charges were related to how SBF created a company with no employees so that FTX.US could get a bank account in California.

Initially, FTX couldn't get a bank account in California because it was not a licensed money services business. However, to circumvent this, SBF created a new company to skirt the prohibitions.

By doing this, the FTX founder reportedly gave false statements on the bank's due diligence questionnaire. These allegations come as part of the revelations in unsealed documents regarding the case.

The new allegations include the following.

Conspiracy to commit bank fraud
Conspiracy to operate an unlicensed money-transmitting business

The filing did not reveal the bank's name, and only two of the four new counts were made public on Thursday.

In December, the SEC said that certain FTX customers were made to deposit to North Dimensions, a low-profile company founded in August 2020. The agency, however, did give a statement mentioning the company.

SEC: "Bankman-Fried had directed FTX to have customers send funds to North Dimension in an effort to hide the fact that the funds were being sent to an account controlled by Alameda."

In November, then-CEO SBF reportedly sold FTX equity to employees at a 50% discount. During that time, the report shared how employees tried selling off assets.

SBF, along with the other founder, Zixiao "Gary" Wang, and other high-profile individuals, used a Signal group chat called "Wirefraud." Other individuals include FTX engineer Nishad Singh and Caroline Ellison, the former Alameda Research chief executive.

The former FTX founder denied that such a group chat actually existed.

See flow at unusualwhales.com/flow.

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