On Monday evening, Bahamian authorities arrested FTX founder and former CEO Sam Bankman-Fried at the request of the US government. The following morning, the Securities and Exchange Commission (SEC), Department of Justice (DOJ) and Commodity Futures Trading Commission (CFTC) filed formal civil and criminal charges against Bankman-Fried in "parallel actions." It was a lot to take in all at once, so below Engadget has broken up current charges against SBF by agency, with some additional context provided.

Those indictments likely represent only the start of Bankman-Fried's troubles. In addition to the charges it announced on Tuesday, the SEC said it was investigating Bankman-Fried for other securities violations. The agency also announced that it’s actively examining the actions of other FTX executives and employees. As more charges are unsealed, Engadget will continue to update this article.

Securities and Exchange Commission

The Securities and Exchange Commission accused SBF of defrauding FTX investors and customers of more than $1.9 billion. Starting as early as May 2019 until as recently as this past November, "Bankman-Fried was orchestrating a massive, years-long fraud, diverting billions of dollars of the trading platform's customers funds for his own personal benefit and to help grow his crypto empire," the SEC said.

All the while, Bankman-Fried portrayed himself as a responsible business leader building a safe trading platform with "sophisticated, automated measures to protect customer assets." In reality, the SEC says, "Bankman-Fried orchestrated a fraud to conceal the diversion of customer funds to his privately-held crypto hedge fund, Alameda Research."

Bankman-Fried told investors and customers FTX's sister company was just another platform on the exchange with no special privileges to speak of. "These statements were false and misleading," according to the SEC. Alameda had access to a "virtually unlimited 'line of credit" unknowingly funded by FTX customers. In May 2022, when Alameda's lenders demanded the firm repay loans worth billions of dollars, Bankman-Fried allegedly directed FTX to divert even more money to the hedge fund.

The SEC seeks to bar Bankman-Friend from trading securities in the future. The agency also wants to seize his ill-gotten gains and bar him from acting as an officer or director at another company.

Current FTX CEO John Ray III testified before the House Financial Services Committee on Tuesday — SBF had said he would attend the hearing before his arrest. Ray spoke to some of the allegations detailed by the SEC. "This is really old-fashioned embezzlement," he told the panel. "We've lost $8 billion. I don't trust a single piece of paper in this organization."

Department of Justice

In addition to civil charges, Bankman-Fried faces a criminal indictment from the Justice Department. On Tuesday, prosecutors from the Southern District of New York filed eight charges against the former executive, including multiple counts of wire fraud. The Justice Department alleges SBF conspired with other individuals to defraud investors by sharing misleading information about FTX and Alameda's financial condition. Prosecutors further accused him of attempting to commit commodities and securities fraud. On top of that, Bankman-Fried allegedly broke federal election laws by donating more than is legally allowed and in the names of other people.

SBF spoke about his political donations in a recent interview with journalist Tiffany Fong. "I donated to both parties. I donated about the same amount to both parties," he said. "All my Republican donations were dark. The reason was not for regulatory reasons, it's because reporters freak the fuck out if you donate to Republicans."

It's worth emphasizing how serious the criminal charges against Bankman-Fried are. For context, a federal judge recently sentenced Theranos founder and former CEO Elizabeth Holmes to 11 years in prison for defrauding the company's investors and patients. Meanwhile, Ramesh "Sunny" Balwani, the startup's former chief operating officer, was sentenced to nearly 13 years in prison for his role in the scheme. Sam Bankman-Fried stands accused of defrauding investors of almost $2 billion, or about twice what investors lost to Theranos.

Commodity Futures Trading Commission

Rounding out the current charges against Bankman-Fried, the Commodity Futures Trading Commission accused the former executive of using Alameda Research to "surreptitiously" siphon customer funds. "At Bankman-Fried's direction, FTX executives created features in the underlying code for FTX that allowed Alameda to maintain an essentially unlimited line of credit on FTX," the regulator alleges. It adds that Alameda had other "unfair" advantages, including an exemption from the platform's auto-liquidation risk management process.

As early as May 2019, SBF and "at least one" other Alameda executive directed the firm to use FTX customer funds to trade on competing platforms and buy "high-risk" digital assets. Additionally, the CFTC alleges that Bankman-Fried and his cohorts "took hundreds of millions of dollars in poorly-documented 'loans' from Alameda," which they then used to purchase real estate and make political donations.

For his actions, the CFTC is seeking to ban Bankman-Fried from trading derivatives and impose civil penalties against him. It also wants to bar him from acting as a director or officer in the future.

Following his arrest in the Bahamas, the US Securities and Exchange Commission (SEC) has charged FTX co-founder Sam Bankman-Fried with "defrauding investors," it announced. It alleges that Bankman-Fried "concealed his diversion of FTX customers' funds to [the] crypto trading firm Alameda Research while raising more than $1.8 million from investors." 

At the same time, the US Attorney's Office or the Southern District of New York and the Commodity Futures Trading Commission (CFTC) also announced charges against Bankman-Fried in parallel actions, according to the SEC. 

"We allege that Sam Bankman-Fried built a house of cards on a foundation of deception while telling investors that it was one of the safest buildings in crypto," said SEC Chair Gary Gensler. "The alleged fraud committed by Mr. Bankman-Fried is a clarion call to crypto platforms that they need to come into compliance with our law."

Developing...

Before Trump-era sanctions made the company a non-player in the market, Huawei was briefly the world’s largest phone manufacturer, surpassing both Samsung and Apple in shipments. In a sign of how much it has fallen since then, Huawei announced this week it recently entered into a patent cross-licensing agreement with its biggest domestic rival. Oppo, the parent company of OnePlus and subsidiary of one of China’s largest electronics manufacturers, now has global rights to Huawei’s coveted 5G patents.

The companies did not disclose the financial terms of the deal, but we have some idea of the money involved thanks to information Huawei has shared in the past. When the firm announced it was planning to monetize its patent portfolio more aggressively last year, it said it would charge phone makers a “reasonable” $2.50 per device to license its technologies. Huawei also said it expected to generate an additional $1.2 billion to $1.3 billion in revenue between 2019 and 2021 due to the move. When you consider Oppo and Vivo (both owned by China’s BBK Electronics) shipped more than 51 million smartphones last quarter, that’s a lot of money on the line.

At the same time, Oppo is obtaining access to some critical technologies. As of 2021, approximately 18.3 percent of Huawei’s 5G patents fell under the Standard Essential Patent (SEP) category, meaning they were considered critical to the 5G standard. At the time, Huawei had the most in-use 5G-related SEPs of any company in the world.

It will be interesting to see if the agreement draws interest from lawmakers in the US and other parts of the world. For much of the past decade, BBK has managed to stay under the radar of regulators and mainstream media in the way that Huawei and ZTE have not. The company’s segmented brand portfolio makes its footprint seem smaller than it is. In reality, it’s consistently been one of the largest and most important phone makers in the world.

Jeep parent company Stellantis on Friday said it would indefinitely shut down a manufacturing plant in Illinois and lay off approximately 1,350 employees early next year. The facility – located in Belvidere, a city 75 miles northwest of downtown Chicago – is responsible for producing the internal combustion engine Jeep Cherokee crossover. In a statement the automaker shared with Reuters, Stellantis blamed the cost of electrifying its cars for the move.

“[The automotive industry] has been adversely affected by a multitude of factors like the ongoing COVID-19 pandemic and the global microchip shortage, but the most impactful challenge is the increasing cost related to the electrification of the automotive market," the company said, adding that it may shutter the facility permanently as it considers what to do next.

United Auto Workers Local 1268 shop chairman Tim Ferguson told Reuters that company documents show Stellantis plans to move Cherokee production to a facility in Toluca, Mexico. "To me, there is no question about it," he said. "Their plan is to close this plant." Stellantis declined to comment on Ferguson’s allegations. “We are not commenting on the future of the Cherokee,” the company said.

As The Verge points out, Stellantis isn’t the first automaker to blame EVs for a recent set of layoffs. In August, Ford cut about 3,000 employees. “We have an opportunity to lead this exciting new era of connected and electric vehicles,” the automaker said at the time. “Building this future requires changing and reshaping virtually all aspects of the way we have operated for more than a century.”

It’s also worth noting Friday’s announcement came on the same day that workers at a General Motors-LG battery cell facility in Ohio voted overwhelmingly in favor of unionization. Unions in France, Italy, Canada and other parts of the world recently asked Stellantis to raise worker wages by as much as 8.5 percent following a year of record global inflation. In the third quarter of the year, Stellantis said revenue grew to €42.1 billion (approximately $44 billion), a 29 percent from the same period last year.

The Federal Trade Commission has filed an antitrust lawsuit in a bid to block Microsoft's planned $68.7 billion takeover of Activision Blizzard. The FTC started looking into the deal and its potential impact on the video game market soon after it was announced in January. Evidently, the agency was concerned enough to pump the brakes on the buyout.

The FTC's commissioners voted in favor of the lawsuit along party lines. The commission's three Democratic approved it and the Republican Commissioner Christine S. Wilson voted against it.

While the lawsuit doesn't necessarily kill the deal, it's unlikely to be resolved by July, as Politico, which had reported that an FTC bid to block the merger was likely, recently noted. That was the deadline Microsoft and Activision set for closing the deal. If the acquisition hasn't closed by then, the companies will have to renegotiate the agreement or even walk away from the merger. Regulators in other jurisdictions have been taking a close look at the deal, including in the UK and the European Union (which should complete its investigation by late March). 

Sony is the merger's most prominent opponent. It has expressed concern that Microsoft would make games such as Call of Duty exclusive to Xbox platforms (which could cost Sony hundreds of millions of dollars a year). However, Microsoft has said it wants to keep Call of Duty on PlayStation and it claims to have offered Sony a 10-year agreement to that effect.

Just ahead of the FTC's anticipated vote, Microsoft said it struck a deal with Nintendo to bring Call of Duty games to the company's systems if the merger closes. Call of Duty will also remain on Steam as part of a separate pact with Valve.

Microsoft and Activision have been downplaying the significance of the deal in an attempt to appease regulators and push it through. For one thing, Microsoft has claimed that Sony has more exclusive games, "many of which are better quality," in a filing with the UK's Competition and Markets Authority (CMA). It also said Activision Blizzard doesn't have any "must-have" games, despite having some of the most popular titles in the world (including Call of Duty: Modern Warfare II, Overwatch 2 and World of Warcraft) under its umbrella.

That said, Microsoft has suggested that the acquisition the deal is more about gaining a foothold in the mobile gaming market, where Activision's King division is a major player. For instance, Candy Crush Saga has had more than 3 billion downloads.

Developing...

Microsoft vows to bring Call of Duty to Nintendo and to continue making it available on the latter's consoles for 10 years if its Activision Blizzard acquisition pushes through. Phil Spencer, Microsoft Gaming's CEO, has announced the company's commitment on Twitter, adding that "Microsoft is committed to helping bring more games to more people — however they choose to play." Spencer previously said during an interview that the company intends to treat Call of Duty like Minecraft that's available across platforms and that he would "love to see [the game]" on the Switch. A 10-year commitment potentially means that the franchise will also be released for the current Switch's successors. 

In addition, Spencer has announced on Twitter that Microsoft will continue to offer CoD on Steam, alongside the Xbox, after the deal is closed. As The New York Times says, this announcement could be a move to appease the Federal Trade Commission and to get regulators on their side. The publication says the FTC is expected to discuss the acquisition in a closed-door meeting on Thursday, where the agency will decide whether to take steps to block the deal. 

A recent report by Politico claimed that Microsoft failed to convince the FTC staff reviewing the acquisition with its arguments and that the commission will likely file an antitrust lawsuit to block it as soon as this month. The FTC is reportedly concerned the purchase would give Microsoft an unfair advantage and that it would reduce competition in the market. 

In an opinion piece written for The Wall Street Journal, Microsoft President Brad Smith defended the acquisition and argued that it's good for gamers. FTC suing to block the deal "would be a huge mistake," he said, and would hurt competition in the industry instead. Smith also said that Microsoft offered Sony, the loudest dissenting voice to the merger, a 10-year contract ensuring all new CoD releases would be available on the PlayStation the same day they go out for the Xbox. "We're open to providing the same commitment to other platforms and making it legally enforceable by regulators in the US, UK and European Union," he wrote. Whether these efforts are enough to assure regulators that the purchase wouldn't be detrimental to the industry remains to be seen. 

Ye is no longer buying Parler, the controversial social media app that’s billed itself as a “free speech” alternative to Twitter. Ye, formerly known as Kanye West, originally struck a deal with Parlement Technologies in October to buy the company for an undisclosed amount.

That deal is now off, according to the company. “Parlement Technologies has confirmed that the company has mutually agreed with Ye to terminate the intent of sale of Parler,” a spokesperson for Parler said in a statement. “This decision was made in the interest of both parties in mid-November. Parler will continue to pursue future opportunities for growth and the evolution of the platform for our vibrant community.”

The spokesperson didn’t immediately respond to questions about why the acquisition was terminated. News of the deal imploding comes just hours after Ye praised Nazis and said, “I like Hitler,” during an appearance on Alex Jones’ podcast.

Ye had first announced he would buy Parler after he was suspended from Twitter following a series of antisemitic tweets. (Twitter CEO Elon Musk later welcomed him back to the platform.) At the time, Parlement technologies CEO George Farmer said that "the proposed acquisition will assure Parler a future role in creating an uncancelable ecosystem where all voices are welcome.”

Cryptocurrency lender BlockFi has filed for Chapter 11 bankruptcy protection. The move comes just over two weeks after BlockFi suspended all platform activity, including withdrawals, in the wake of crypto exchange FTX's implosion. "Given the lack of clarity on the status of FTX.com, FTX US and Alameda, we are not able to operate business as usual," the company said in an FAQ. Withdrawals remain paused.

"BlockFi’s chapter 11 cases will enable BlockFi to stabilize its business and provide BlockFi with the opportunity to consummate a reorganization that maximizes value for all stakeholders," BlockFi said. "The court-supervised restructuring process is transparent and encourages dialogue between all stakeholders."

As with many other players in the industry, BlockFi faced an uncertain future after several crypto companies crumbled in the spring, taking the prices of many cryptocurrencies down with them. Soon after, FTX agreed to prop up BlockFi with a $400 million credit line. The agreement also gave FTX the option to buy BlockFi for up to $240 million. As The New York Times notes, that meant the companies had close financial ties and FTX's collapse into bankruptcy has had a knock-on effect on BlockFi.

“With the collapse of FTX, the BlockFi management team and board of directors immediately took action to protect clients and the company,” Mark Renzi of Berkeley Research Group, BlockFi's financial advisor, said in a statement. “From inception, BlockFi has worked to positively shape the cryptocurrency industry and advance the sector. BlockFi looks forward to a transparent process that achieves the best outcome for all clients and other stakeholders.”

BlockFi says that, as part of its restructuring, it will "focus on recovering all obligations owed to BlockFi by its counterparties, including FTX and associated corporate entities." However, it noted that recoveries from FTX are likely to be delayed, given that company's bankruptcy process. In addition, BlockFi says it has $256.9 million in cash on hand, which should provide “sufficient liquidity to support certain operations during the restructuring process," such as paying employee wages and continuing benefits.

In a court filing, BlockFi estimated it had more than 100,000 creditors and consolidated liabilities of between $1 billion and $10 billion. Among the listed creditors are FTX (to which it owes $275 million in loan repayments) and the Securities and Exchange Commission, which it owes $30 million.

Earlier this year, BlockFi agreed to pay $100 million to settle charges from the SEC and 32 states. The SEC claimed that BlockFi offered interest accounts without registering them under the Securities Act. The agency also found that the company made "false and misleading" claims related to the level of risk in its lending activity and loan portfolio.

Filing for Chapter 11 bankruptcy protection doesn't inherently mean a company is done for. The process allows a struggling business to keep trading while it restructures and looks for ways to pay back creditors. However, bankruptcy isn't easy to come back from, and BlockFi is just the latest in a long line of dominoes to fall in the precarious crypto industry.

Denis Sverdlov, the CEO and founder of the embattled EV startup Arrival, has stepped back from the company's day-to-day operations, according to The Financial Times and Bloomberg. Sverdlov won't be leaving the company completely but will instead switch places with Arrival chair Peter Cuneo, who served as CEO of Marvel Entertainment before it was acquired by Disney. 

Arrival had big plans for the EV space and was developing an electric van, bus and car. In the middle of 2022, however, the company cut its workforce because it was running out of cash. It also announced that it was shuttering its bus and car projects completely to focus on developing its vans for the US market, citing the EV tax credits the US offers as a major factor in its decision. Cuneo will run the company while it's seeking to raise funds under the threat of bankruptcy. 

Arrival likely decided on the swap, hoping Cuneo could use his expertise — after all, he's known for orchestrating successful corporate turnarounds and had helped guide Marvel out of bankruptcy during his tenure as its CEO. Whatever Cuneo decides to do, he'll have to accomplish it without the help of one key executive: Avinash Rugoobur, company president and strategy chief, has left his roles but will still serve as a board member. 

The EV startup teamed up with UPS to build a new generation of electric delivery vans in 2018, and in 2020, UPS put in an order for 10,000 vehicles to be rolled out over the next few years. Arrival said in September that despite issues with production, it was done building a "production verification vehicle" and that it will be able to deliver 20 vans to customers by the end of the year. 

Add HP to the list of tech companies cutting staff. The PC maker plans to lay off as many as 6,000 employees over the next three years. The cuts are part of a broader restructuring HP announced during its Q4 earnings call on Tuesday (via Gizmodo). The company estimates its “Future Ready Transformation plan” will save it $1.4 billion by the end of fiscal 2025, in part by reducing its headcount by at least 4,000 employees.

“The company expects to reduce gross global headcount by approximately 4,000-6,000 employees,” HP said. “These actions are expected to be completed by the end of fiscal 2025.”

HP employs approximately 51,000 employees globally. The company’s most recent fiscal quarter saw revenue drop by more than 11 percent year-on-year to $14.8 billion. CEO Enrique Lores blamed the poor performance on macroeconomic conditions and “softening demand” for the company’s PCs and printers.

Following Tuesday’s announcement, Lores said HP’s restructuring plan would “enable [the company] to better serve our customers and drive long-term value creation by reducing our costs and reinvesting in key growth initiatives to position our business for the future.”

HP isn’t the only tech company to announce significant job cuts in recent weeks. Twitter completed multiple rounds of layoffs after Elon Musk took control of the company on October 27th. Meta and Amazon also announced job cuts this month. In the case of the social media giant, the 11,000 employees it let go on November 9th represented the first mass layoffs in the company’s history.