As a reminder, the lawsuit against Sam Bankman-Friede began shortly after his exchange collapsed in November 2022. A full list of the initial charges against the former FTX executive can be found here. In brief, Sam is primarily accused of financial fraud by electronic means, with a maximum penalty of up to 20 years.


It will be recalled that the main problem with FTX was previously the existence of a so-called backdoor - i.e. a software loophole that allowed the company's management to withdraw funds from exchange users without their knowledge and use them for their own needs. Specifically, Sam donated money to politicians, FTX employees purchased real estate, and Alameda traders used cryptocurrencies to secure their own trades.

Of course, such activities are illegal, as exchange users were not only unaware of what was going on, but also did not consent to such transactions.


In any case, Sam has pleaded not guilty to any of the charges, effectively going all-in. He will face either a long prison sentence or a miraculous rescue, which is hard to believe.

On top of this, the court record now includes new claims from the prosecution, as well as new injunctions for Bankman-Fried personally.

What is Sam Bankman-Fried being tried for

According to the prosecution’s lawsuit, Bankman-Fried transferred at least $40 million as a bribe to “one or more Chinese government officials”. Sam allegedly wanted to withdraw funds belonging to Alameda Research. The total amount of assets blocked reaches the billion dollar mark.

According to Cointelegraph journalists, Alameda’s assets were frozen in early 2021 on two major Chinese cryptocurrency exchanges. Bankman-Fried was aware of the measures taken and tried to withdraw the money in various ways – including illegally with the circumvention of Chinese sanctions.

Here’s a quote from the court record on the matter.

After months of unsuccessful attempts to unfreeze the accounts, Samuel Bankman-Fried discussed the situations with others. Eventually he agreed and told them to give a multi-million dollar bribe to achieve the goal.

It is not yet clear which Chinese cryptocurrency exchanges Alameda used in early 2021, as China officially banned cryptocurrency exchanges from providing services in the country back in 2017. The Chinese government imposed a complete ban on crypto – including cryptocurrency mining – back in September 2021.


By the way, the situation is now changing. From early summer 2023, interaction with cryptocurrencies in Hong Kong will become legal for locals, which is already attracting blockchain companies. In particular, representatives of cryptocurrency exchange OKX announced the establishment of a branch in the region yesterday.

It is particularly amusing that such changes are taking place against the backdrop of a tough attitude towards digital assets in the US. Recall that this week the Commodity Futures Trading Commission (CFTC) filed a lawsuit against the Binance exchange, accusing it of violating derivatives regulations.


The conditions of Sam’s bail have also appeared to have changed. Recall that he was released from the courtroom at the end of 2022 on nominal bail of $250 million. Later in court, however, the prosecution side began to raise the subject of Bankman-Fried being transferred to prison: still, prosecutors don’t like that the former FTX CEO was violating the terms of his bail.

???? YOU CAN FIND MORE INTERESTING THINGS ON OUR YANDEX.ZEN!

The breach refers to an attempt to influence witnesses in the case. Prosecutors believe the defendant should be barred from communicating with former FTX employees so that their testimony does not change.

This week, Sam’s lawyers were able to hammer out a deal: Bankman-Fried will remain under house arrest at his parents’ home in Palo Alto, but he will not be allowed to use a smartphone or a computer with internet access. In addition, messengers or any other applications where communication is possible have been banned. Sam will only have a laptop with basic functions.

Sam’s parents have agreed to restrict his access to their devices and have also signed written undertakings not to bring prohibited electronic devices into their home. In the event of a “reasonable suspicion” of a breach, Sam must produce his devices for search.

The deal with the prosecution has yet to be approved by Judge Lewis Kaplan. If that happens, Bankman-Fried will face new conditions, which differ from the previously proposed list of needs being considered in court.


In March, the arrest of another infamous member of the blockchain industry came to light. We are talking about Do Kwon, co-founder of Terra LUNA. He was detained on 23 March 2023 in Montenegro along with the company's former CFO, with both guys trying to board a flight to Dubai using fake documents from Costa Rica.

Kwon is now expected to be forced to serve time in a Montenegrin prison before proceeding to extradition to South Korea or the US. As the local prosecutor noted, Kwon will not go to another country without punishment for the fake passport. The misdemeanour is punishable in the country by up to five years in prison.



It looks like Sam Bankman-Fried's chances of getting away with it are approaching zero. The number of serious charges against the former businessman is still too high, and it is unclear how cooperative Sam's former colleagues have been in agreeing to cooperate with the investigation. And as they also face imprisonment, they will clearly be keen to be as helpful to prosecutors as possible.