New Indictment Portrays Bankman-Fried’s ‘Savior’ Image as a Smokescreen

Federal prosecutors have indicted FTX founder Sam Bankman-Fried for a host of new crimes.

According to a 12-count indictment unsealed Thursday (Feb. 23), Bankman-Fried — already facing decades in prison on fraud and conspiracy charges — now stands accused of bank fraud, operating an unlicensed money transmitting business and campaign finance violations.

The charges come amid a wave of regulatory crackdowns on the digital asset sector, and place new pressure on the one-time “savior” of the cryptocurrency industry.

The indictment says that the image of Bankman-Fried as crypto’s white knight, abiding by the law and ensuring customers and investors were kept safe, was a mirage.

“Contrary to Bankman-Fried’s promises to FTX customers that the exchange would protect their interests and segregate their assets, Bankman-Fried routinely tapped FTX customer assets to provide interest-free capital for his and Alameda’s private expenditures, and in the process exposed FTX customers to massive, undisclosed risk,” the indictment said.

Bankman-Fried, 30, has pleaded not guilty to the previous charges against him. He is free on $250 million bail, awaiting a trial scheduled for October.

The new indictment shows that Bankman-Fried and his companies made more than 300 political contributions — higher than the previously reported figures — to politicians of both major parties, with donations totaling tens of millions of dollars.

According to prosecutors, Bankman-Fried and others made campaign contributions under other FTX employees’ names.

“Bankman-Fried’s use of straw donors allowed him to evade contribution limits on individual donations to candidates to whom he had already donated,” the indictment says.

In addition, prosecutors now allege that Bankman-Fried and others, when opening a bank account, “falsely represented to a financial institution that the account would be used for trading and market making.” In reality, the account was created to receive and transmit customer funds, the indictment charges.

The indictment says Bankman-Fried must forfeit any assets “derived from proceeds traceable to the commission of said offenses.”

This includes money that has already been seized by the U.S. Justice Department, including 55 million shares in the Robinhood trading app.

Those shares — worth about $540 million Thursday — are the subject of a legal fight. A number of parties claim ownership of the shares, including FTX itself, Bankman-Fried’s bankrupt Emergent Fidelity Technologies, crypto lender BlockFI and Robinhood itself.

Bankman-Fried has also said he wishes to hold onto the shares, which will be used to fund his defense in court.


MercadoLibre Payment Volumes Leap 33% as Platform Reaches 100M Buyer Milestone

MercadoLibre’s fourth quarter results showed double-digit growth in unique active buyers and items sold across the company’s marketplace, along with momentum in its credit card business.

The most recent earnings supplementals, released after the markets closed on Thursday (Feb. 20), detailed that during the fourth quarter, gross merchandise values (GMV) were up 8%, to $14.5 billion, items sold gathered 27% year over year to 525.5 million, and the total payments volumes soared 33% to $58.9 billion.    

In a nod to eCommerce momentum, same-day and next-day shipments gained 21%, and the company disclosed that 49% of shipments were delivered in this time frame.

Drilling down into the country-by-country activity, MercadoLibre’s GMV growth, year over year, was 28% in Mexico, 32% in Brazil and 141% in Argentina.

The company’s credit portfolio was up 74% year over year to $6.6 billion.

Unique buyers gained 24% to 67.3 million individuals and items sold per buyer gained 3% year over year, to 7.8. Within FinTech Services, monthly active users surged 34% to 61.2 million. Within that segment, credit cards are the largest portfolio, at 40% of the total credit portfolio, up from a 32% contribution a year ago. For the full year, the company’s credit card business jumped by 118% to $2.6 billion.

Credit Metrics Improve

Overall credit metrics improved, where past due percentages of non-performing loans — defined as being past due between 15 and 90 days — stood at 7.4%, down from 7.8% in the third quarter, and down from 8.2% last year. Monthly active sellers with credit were 24.6%, up from 14.2% in the fourth quarter of 2023. 

For the full year, the company logged a significant milestone, notching 100 million unique buyers on its platform, adding 18.8% through the year.

Shares were up 13% in after hours trading on Thursday.

During the conference call with analysts, CFO Martin de los Santos said that, in discussing the credit card business, “having a solid credit card offering is critical to our ambition of being the largest digital bank in Latin America, and leveraging our unique competitive advantages in underwriting and distribution. So we’ll continue investing in our platform to capture these opportunities even if some time they put short-term pressure on margins.” 

All cohorts of the card portfolio are becoming profitable, the CFO said, who added that “the pillars of our long-term growth strategy are based on the relatively low penetration of eCommerce in our region. There is a huge opportunity to offer better financial products to large segments of a population that have been underserved by traditional banks and a digitalization of cash for merchants and individuals.”

During the question-and-answer session with analysts, management noted that credit quality has remained strong, with no deterioration — and in fact, in Brazil the credit card business had the lowest first payment default metrics on record as of the end of last year. 

“Essentially, we’re being a little bit more cautious. Nonetheless, we are very comfortable with the level of risk we are taking,” the CFO said. Elsewhere, management commentary on the call noted that eCommerce volumes in categories such as groceries and consumer electronics are performing well.