US courts have created an FTX Task Force to track and recover funds for customers hit by the exchange’s bankruptcy. It will also process prosecutions and investigate the matter following FTX’s collapse.
The US Attorney’s Office for the Southern District of New York’s (SDNY) announced the task force following a statement from US Attorney Damian Williams, the prosecutor overseeing the FTX case.
He said in his statement that authorities were “working around the clock to respond to the implosion of FTX.”
“It’s an all-hands-on-deck-moment […] “We are launching the SDNY FTX Task Force to ensure that this urgent work continues, powered by all of SDNY’s resources and expertise until justice is done,” he added.
The Crypto Cleanup Crew
Several senior prosecutors across multiple units are tasked with the “investigation and prosecution of matters related to the FTX collapse.” Departments involved include units for securities and commodities fraud, public corruption, money laundering, and transnational crime.
Following his arrest in the Bahamas, Sam Bankman-Fried, the disgraced former CEO faces multiple charges. These include securities fraud, wire fraud, conspiracy to commit wire and securities fraud, violating campaign finance laws, and money laundering, among others.
Williams also said in a 13 December statement,
“One month ago, FTX collapsed, causing billions of dollars in losses to its customers, lenders, and investors. Now, a federal grand jury in New York has indicted the former founder and chief executive officer of FTX and charged him with crimes related to the phenomenal downfall of that one-time cryptocurrency exchange, including fraud on customers, investors, lenders, and our campaign finance system. As today’s charges make clear, this was not a case of mismanagement or poor oversight, but of intentional fraud, plain and simple.”
Guilty as Charged?
The news comes as Bankman-Fried, Alameda Research chief executive Caroline Ellison, and FTX co-founder Gary Wang face charges linked to the aftermath of his company’s bankruptcy. Just days before its implosion, FTX executives hired a $12 million retainer tasked with managing the fallout.
Bankman-Fried pleaded “not guilty” on 3 January to all charges totalling 115 years in prison. Conversely, Ellison and Wang plead guilty, with the former striking a plea deal with prosecutors. This reduced her sentence to one charge rather than the full seven totalling 110 years in prison.
