- The Department of Justice has levied superseding charges against Sam Bankman-Fried after court declared jail term pending hearing.
- The prosecution seeks to indict SBF for donating $100 million to politicians in the 2022 elections from stolen customer funds.
- It adds to the list of charges, comprising seven counts of conspiracy and fraud over the collapse of the exchange, with clear intentions of self-gain.
The US Department of Justice (DOJ), through its criminal division, has issued an indictment against FTX founder and former CEO Sam Bankman-Fried, calling him out for stealing customer funds, committing fraud, and several other conspiracies. It comes barely a week after federal judge Lewis Kaplan issued a sentence against SBF, that he be held in jail as he awaits the October hearing.
US DOJ indict SBF for funding politics with stolen funds
The DOJ claims that SBF stole customer funds and directed it to politics, donating to both Democrat and Republican leaders with a sum of up to $100 million. Specifically, the funds supported the recipients’ campaigns as they raced for political seats during the 2022 midterm elections in the US.
Noteworthy, the names of certain FTX executives were used to make the donations, all in the spirit of concealing the source’s identity, SBF. Citing a paragraph from the DOJ’s indictment letter:
To conceal the fact that the Alameda account containing FTX customer deposits was a source of the donations, Bankman-Fried directed that money from the Alameda account be wired to these executives’ personal bank accounts and that these executives then make donations in their own names.
Further, SBF is accused of self-enrichments at the expense of customers and advancing the exchange and his friends in politics. To some, the donation was meant to give him [SBF] some level of influence in lawmaking where crypto is concerned. On this assumption, another section of the indictment states:
He leveraged this influence, in turn, to lobby Congress and regulatory agencies to support legislation and regulation he believed would make it easier for FTX to continue to accept customer deposits and grow, which would, in turn, allow the misappropriation scheme to continue
These claims are part of the seven counts of conspiracy charges he faces and allegations of fraud that led to the collapse of his crypto empire, FTX exchange.
It should be noted that the exchange toppled after revelations that Sam Bankman-Fried was commingling assets with sister firm Alameda Research, a crypto hedge fund led by SBF’s lover, Caroline Ellison. The news breaking out inspired fear among customers leading to a bank run, as customers withdrew their assets to avoid exposure. The ensuing capital outflow left FTX with a liquidity crunch, incapable of facilitating transactions.
FTX token FTT price implication
As negative news keeps streaming in for the convicted former FTX executive Sam Bankman-Fried, the native asset of the ecosystem, FTT, continues to bear the weight. Overhead pressure continues to accumulate, limiting the growth potential for the altcoin. Accordingly, the FTT price may drop further, possibly reaching the support floor at $0.798. This would denote a 35% slump.
The Relative Strength Index (RSI) lies flat below 50, while the Awesome Oscillator’s histograms are negative. This shows that bears have a firm grip on FTT price.
FTT/USDT 1-day chart
Conversely, if buying pressure is restored among traders looking to accumulate FTT at current low prices, its market value could surge, shattering past the 100-, 200-, and 50-day Simple Moving Averages (SMA) at $1.215, $1.371, and $1.421 respectively. In a highly bullish case, the altcoin may extend past the $1.758 hurdle before a run-up to the $2.140 range high. Such a move would constitute an 80% climb above current levels.
Bitcoin, altcoins, stablecoins FAQs
Bitcoin is the largest cryptocurrency by market capitalization, a virtual currency designed to serve as money. This form of payment cannot be controlled by any one person, group, or entity, which eliminates the need for third-party participation during financial transactions.
Altcoins are any cryptocurrency apart from Bitcoin, but some also regard Ethereum as a non-altcoin because it is from these two cryptocurrencies that forking happens. If this is true, then Litecoin is the first altcoin, forked from the Bitcoin protocol and, therefore, an “improved” version of it.
Stablecoins are cryptocurrencies designed to have a stable price, with their value backed by a reserve of the asset it represents. To achieve this, the value of any one stablecoin is pegged to a commodity or financial instrument, such as the US Dollar (USD), with its supply regulated by an algorithm or demand. The main goal of stablecoins is to provide an on/off-ramp for investors willing to trade and invest in cryptocurrencies. Stablecoins also allow investors to store value since cryptocurrencies, in general, are subject to volatility.
Bitcoin dominance is the ratio of Bitcoin’s market capitalization to the total market capitalization of all cryptocurrencies combined. It provides a clear picture of Bitcoin’s interest among investors. A high BTC dominance typically happens before and during a bull run, in which investors resort to investing in relatively stable and high market capitalization cryptocurrency like Bitcoin. A drop in BTC dominance usually means that investors are moving their capital and/or profits to altcoins in a quest for higher returns, which usually triggers an explosion of altcoin rallies.