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Once the dust had settled, about US$8.7 billion was still unaccounted for, according to the receiver appointed to manage the liquidation.
Federal prosecutor Damian Williams has accused Bankman-Fried and his associates of systematically diverting funds from FTX clients to prop up Alameda Research, but also wire fraud, securities and commodities fraud, and money laundering.
Danielle Sassoon, an assistant US attorney in Williams’ office, told a hearing that the number of victims of Bankman-Fried’s alleged actions could be “in excess of a million”.
POINTING FINGERS
SBF – as Bankman-Fried is known – was extradited at the end of December from the Bahamas, where FTX was headquartered, and released on a US$250 million bail upon his arrival in New York.
Pending the trial, Bankman-Fried was placed under house arrest at the Silicon Valley home of his parents, both professors at Stanford University.
But US District Judge Lewis Kaplan rescinded that decision, ordering Bankman-Fried behind bars over alleged attempts at witness intimidation.
According to prosecutors, while holed up at his parents’ home, Bankman-Fried spoke regularly to journalists and passed documents to The New York Times in an effort to alter the testimony of Caroline Ellison, his ex-girlfriend and a former Alameda executive.
Ellison has also been indicted in the case: She and three other former executives have pleaded guilty and agreed to cooperate with US authorities, which may prove Bankman-Fried’s undoing in front of the jury.
His former colleagues are expected to take the stand in the courtroom – where Bankman-Fried will likely admit egregious management errors but no wrongdoing, and point the finger at Ellison.
“I didn’t ever try to commit fraud on anyone. I was shocked by what happened this month,” a contrite Bankman-Fried told an interviewer days after his company’s collapse.
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