The Justice Department says Sam Bankman-Fried wanted to regain control of FTX by moving assets and getting better treatment from foreign regulators.

  • The Justice Department said Sam Bankman-Fried wanted to prevent bankruptcy in FTX’s final days.
  • Prosecutors said the crypto mogul wanted to move FTX’s assets outside the country in order to get better treatment from foreign regulators.
  • They also alleged that Bankman-Fried tampered with FTX’s assets in the days leading up to its bankruptcy.

According to the Justice Department, Sam Bankman-Fried hoped to regain control of his collapsed crypto exchange by turning FTX’s assets over to other regulators, who he hoped would treat him leniently.

In a lawsuit on Monday, the Justice Department said that Bankman-Fried was trying to delay FTX’s bankruptcy proceedings at the end of 2022 in order to transfer funds from the defunct cryptocurrency exchange to the jurisdiction of regulators in other countries. Prosecutors argued that the disgraced crypto chief was hoping for better treatment from foreign regulators, which could potentially allow him to regain control of FTX, the statement said.

Bankman-Fried previously said he regretted the decision to file FTX bankrupt last November, shortly after the cryptocurrency exchange experienced “significant” liquidity issues and stopped customer withdrawals. The bankruptcy filing removed Bankman-Freed from leadership of the company and exposed numerous accounting scandals on the exchange, such as the merging of client deposits with Alameda Research, Bankman-Freed’s cryptocurrency trading division.

But the former crypto chief denies the misuse of customer funds and has criticized FTX’s new leadership. He also claims that parts of FTX are still solvent despite the exchange’s lack of record keeping and chaotic balance sheet.

Prosecutors also say that while the cryptocurrency exchange froze customer withdrawals at the end of 2022, Bankman-Fried unfrozen accounts in the Bahamas and allowed millions of customers to withdraw to express their gratitude to the island nation where FTX is headquartered.

“We are deeply grateful for and deeply committed to what the Bahamas has done for us,” Bankman-Fried wrote in a letter to the Bahamas Attorney General. “We also deeply regret this mess.”

Bankman-Fried and FTX co-founder Gary Wang also reportedly took control of $546 million worth of Robinhood stock last year, which prosecutors say was illegally acquired with Alameda funds. The purchase was an attempt to cover up the misuse of FTX customer funds, the statement said. The Justice Department seized more than $450 million worth of shares.

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