FTX “one of the biggest financial frauds” in history, SDNY says

Federal prosecutors on Tuesday called the stunning collapse of FTX "one of the biggest financial frauds in American history," charging that founder and former CEO Sam Bankman-Fried (SBF) defrauded investors while enriching himself.

• In his first public address following Bankman-Fried's sudden arrest in the Bahamas late Monday, Damian Williams, the U.S. Attorney for the Southern District of New York, outlined existing evidence, while insisting the investigation was far from over.

Driving the news: SBF was indicted on eight counts, but outlined several areas of misconduct, including defrauding FTX's investors and customers, and misleading lenders to Alameda (FTX’s sister company and hedge fund).

• He also accused SBF of funneling "illegal" campaign contributions to both parties.

Zoom out: FTX's collapse last month destroyed billions of dollars of customers' funds, and has severely undermined confidence in the still developing crypto ecosystem.

Of note: There was a question about the timing of SBF's arrest, which subsequently made him unable to appear before an expected appearance in Congress to answer questions from lawmakers, under oath.

• Williams said that he authorized charges last Wednesday, and the indictment happened last Friday. The timing of arrest was "dictated by law enforcement."
• He could not speak to the extradition process, but said SBF is still currently in the Bahamas.

Between the lines: Other charges may come later.

• "To anyone who participated in wrongdoing and has yet not yet come forward, come see us before we come see you," Williams said.

Who's who: Representatives of partner task forces were present:

• Michael Driscoll, assistant FBI director in charge of the New York Field Office
• Gurbir Grewal, director of SEC's Division of Enforcement
• Gretchen Lowe, Acting Director of CFTC's Division of Enforcement

Bottom line: Williams said the extradition effort is ongoing,