Bankman-Fried faces FTX lawsuit, witness tampering accusation

FTX filed a lawsuit against founder Sam Bankman-Fried and other former company executives. Other listed defendants include Caroline Ellison, who led Bankman-Fried’s Alameda Research hedge fund; former FTX technology chief Zixiao “Gary” Wang; and former FTX engineering director Nishad Singh.

The company is looking to recoup more than $1 billion lost before it filed for Chapter 11 bankruptcy in November 2022. The lawsuit accused Bankman-Fried and the other executives of misappropriating the money.

In the lawsuit, FTX said the executives used the funds to finance luxury condominiums, political contributions, speculative investments and other “pet projects.” The lawsuit alleges Bankman-Fried sent $10 million in company funds to his personal accounts and is now using that money to pay for his criminal defense. Bankman-Fried is also accused of gifting his father another $10 million.

Bankman-Fried has pleaded not guilty to several criminal charges, with prosecutors calling him the mastermind of a fraud that led to FTX’s collapse. Ellison, Wang and Singh have pleaded guilty and agreed to cooperate with prosecutors.

The FTX lawsuit was filed the same day federal prosecutors accused Bankman-Fried of witness tampering. The prosecutors asked a judge to issue an order that would bar Bankman-Fried and other parties from making public statements that could interfere with a fair trial.

The letter to the judge referenced a New York Times article that included excerpts from Ellison’s personal Google documents. Prosecutors said it was apparent Bankman-Fried shared documents with the Times, and his lawyers have since confirmed to the government that he met with one of the article’s authors in person and shared documents “that were not part of the government’s discovery material.”