Former FTX chief executive Sam Bankman-Fried (center) arrives to file a lawsuit before U.S. District Judge Lewis Kaplan in federal court in Manhattan, New York, January 3, 2023.
Ed Jones | AFP | Getty Images
Manhattan U.S. Attorney’s Office said on Tuesday it had set up an FTX task force to track down and recover the assets of victims of the collapse of the cryptocurrency exchange company, as well as to conduct investigations and prosecution associated with the company and other organizations.
The announcement comes after FTX founder and former CEO Sam Bankman-Fried appeared in U.S. District Court in Manhattan to plead not guilty in his criminal case, which charges him with multiple counts of financial fraud and crimes related to campaign finance.
“The Southern District of New York is working around the clock to respond to the collapse of FTX,” Manhattan U.S. Attorney Damian Williams said in a statement.
“This is the moment when all hands are on deck,” Williams added.
“We are launching the SDNY FTX Task Force to ensure that this urgent work continues with the full resources and expertise of SDNY until justice is done,” he said.
Williams’ top deputy, Andrea Griswold, is leading a task force that will include prosecutors from units to combat securities and commodities fraud, government corruption, money laundering and transnational criminal enterprises.
The Securities and Exchange Commission has estimated that clients have lost more than $8 billion in fraud at FTX and Bankman-Fried hedge fund, Alameda Research.
When FTX filed for Chapter 11 bankruptcy protection in November, it said it had more than 100,000 creditors and $10 billion to $50 billion in liabilities compared to assets in the same range.
Bankman-Fried, 30, is at large but under house arrest at his parents’ residence on a $250 million bail that was set following his extradition from the Bahamas late last month.
Two of his aides pleaded guilty in Manhattan federal court to multiple counts of fraud before he was extradited: Caroline Ellison, the 28-year-old former CEO of Alameda, and FTX co-founder Gary Wang, 29.
Both Allison and Wang cooperate in investigating the Bankman-Fried and related FTX cases.