Wall Street’s top cop is focused on crypto

Damian Williams made history long before he filed criminal charges against FTX founder Sam Bankman-Fried for “one of the biggest financial scams ever”.

In late 2021, the Brooklyn-born son of Jamaican immigrants became the first black person to be sworn in as a US Attorney for the Southern District of New York, the famous branch of the American judiciary whose jurisdiction includes Wall Street and, by extension, all of world finance.

At a ceremony at the Harlem Armory — paid for by Williams himself to ensure the moment was properly marked — the 41-year-old was clear on his priorities. “Abuse of the most vulnerable in our society is on the rise,” he said, announcing that he had created “a brand new civil rights division within the SDNY’s criminal division” to combat this scourge.

Still, it’s Williams’ role in reviving the Bankman-Fried case — who had been courted by politicians, investors, and celebrities as his cryptocurrency exchange grew to $32 billion in value in just three years — that cements his image as the country’s frontrunner could -Eminent Financial Policeman.

“It’s going to be one of the big ones,” said a former Williams supervisor, noting that the indictment against Bankman-Fried came just weeks after FTX filed for bankruptcy. While Bankman-Fried was up in the air to be extradited from the Bahamas, Williams struck another blow, announcing the previously secret guilty pleas from Bankman-Fried’s close colleagues Gary Wang and Caroline Ellison.

Even for an office that prides itself on being fleet-footed, it all happened “very quickly,” the person said.

Previously, other agencies, including the SEC and the New York Attorney General’s office, had taken the reins when it came to pursuing some of the crypto world’s most notorious schemes.

But that changed when crypto markets imploded last summer. “It became a problem mainly for prosecutors — they have to find out who’s swimming without shorts,” said a former senior SDNY official.

Williams “needs to focus on crypto. He has no choice,” said another former colleague. People close to the prosecutor — who will oversee a team that includes veteran trial attorneys Nicolas Roos and Danielle Sassoon — said he is well placed to handle a complex cryptocurrency fraud case.

Williams, educated at Harvard, Cambridge and Yale, worked on John Kerry’s 2004 Democratic presidential campaign and practiced private law at Paul Weiss before being hired by then-US Attorney for SDNY Preet Bharara. He was subsequently promoted by successive heads of SDNY and was appointed head of the core securities unit under Geoffrey Berman.

Damian Williams becomes first black man to be sworn in as US Attorney for the Southern District of New York © Jeenah Moon/AP

“For me, Damian was a real star in an office full of stars; very meticulous, thoughtful and a very experienced litigator and communicator,” said Joon Kim, partner at Cleary Gottlieb and former acting US counsel for SDNY.

Kim chose Williams, who had come through the narcotics and securities departments to retry a corruption case against former New York State Assembly Speaker Sheldon Silver after an appellate court overturned the initial verdict. Kim said he recognized someone who could “thoroughly and fairly investigate highly complex matters and also take these cases to court.”

Williams, said another former colleague, “earned good luck” by being “over-attentive to the blocking and tackling” that goes into building a case as he made his way to the top of the SDNY. An improvement in the data infrastructure used to process evidence, requested by Williams, may have helped expedite charges against Bankman-Fried, a former prosecutor said.

But unlike many of his predecessors who struggled with the “main judiciary” in Washington, Williams has the advantage of working under an attorney general he knows well, having worked for Merrick Garland, then a DC Circuit Court of Appeals judge in 2007 -2008.

While there’s no indication the relationship resulted in the SDNY securing the Bankman Fried case via rival districts, “Damian has to be careful about that relationship,” said the SDNY’s former senior figure, which has since long valued its independence.

Given the excitement surrounding the FTX case, Williams’ tactics have already come under some scrutiny. The bureau has been criticized for allowing Bankman-Fried to be released to his parents’ home in California on $250 million bail, while those charged with lesser crimes were denied bail at the county.

People close to the case said the deal was offered to ensure Bankman-Fried agreed to speedy extradition from the Bahamas and spoke of the SDNY’s determination to ensure the defendant – whose face is now recognizable around the world is – will be tried in New York. The same logic underpins the deals with lesser-known Wang and Ellison, people said.

Ian McGinley, a former SDNY prosecutor who worked on crypto-related cases and is now a partner at Akin Gump, said that generally, “one of the goals of the cases is to have chilling value.”

A conviction of Bankman-Fried would put Williams – who has been among the more reserved residents of his office – further in the spotlight.

As expected, talk of the Democrat’s potential strengths as a candidate for elected office is rife among politicians. Aside from his record as a prosecutor, Williams’ backstory, including meeting his wife on a cheap intercity bus, would appeal to voters, a Democratic fundraiser said.

But Williams, who pledged to be “completely independent of politics” at his inauguration, “is deliberately apolitical in his approach,” said a former federal prosecutor who until recently worked closely with the SDNY chief.

He “showed no indication” of openly pursuing political cases for their own sake, the person said. The acquittal of Trump ally Tom Barrack by a Brooklyn jury in November proves that such cases, while attracting press attention, can sometimes be futile endeavors, they added.

The path from the SDNY to other national stages is well trodden—Rudy Giuliani later became mayor of New York City and James Comey ran the FBI. But friends of Williams said they’ve never heard him express any ambitions beyond his current role.

“I always say I’d do this job for free,” says Williams told a room full of New York attorneys at an event last year. “Therein lies magic for me.”

https://www.ft.com/content/7728ed7c-e708-457e-972a-75bc029b83f2 Wall Street’s top cop is focused on crypto

Adam Bradshaw

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