Wall Street’s top cop is interested in crypto

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

In late 2021, the Brooklyn-born son of Jamaican immigrants became the first black man to be sworn in as a U.S. attorney for the Southern District of New York, the historic branch of U.S. justice whose jurisdiction includes Wall Street and, by extension. , the world. finance.

In a ceremony at the Harlem Armory – paid for by Williams himself to ensure the moment was marked correctly – the 41-year-old was clear on his priorities. “The abuse of the most vulnerable in our society is on the march,” he said, announcing that he had “created an all-new civil rights unit within the criminal division” of SDNY to combat this scourge.

Yet that’s Williams’ role in taking over the Bankman-Fried affair – which had been courted by politicians, investors and celebrities as its cryptocurrency exchange hit a $32 billion valuation in only three years – which could cement his image as a pre-eminent financial cop.

“It will be one of the biggest,” said a former Williams supervisor, who noted that the Bankman-Fried impeachment came just a few weeks after FTX filed for bankruptcy. As Bankman-Fried was in the air being extradited from the Bahamas, Williams delivered another blow by announcing the previously secret guilty pleas close colleagues of Bankman-Fried, Gary Wang and Caroline Ellison.

Even for an office that prides itself on being fast, it all happened “really fast,” the person said.

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

But that changed when the crypto markets imploded last summer. “It became a problem mainly for prosecutors – you have to know who is swimming without their shorts,” said a former senior SDNY official.

Williams “needs to focus on crypto. He has no choice,” according to another former colleague. People close to the prosecutor – who will oversee a team including experienced litigators Nicolas Roos and Danielle Sassoon – said he was well-placed to handle a complex cryptocurrency fraud case.

Educated at Harvard, Cambridge and Yale, Williams worked on John Kerry’s 2004 Democratic presidential campaign and spent time in private practice with Paul Weiss before being hired by SDNY US attorney Preet Bharara. He was later elevated by successive heads of SDNY and appointed head of the Central Securities Unit under Geoffrey Berman.

Damian Williams being sworn in as the first black person to serve as U.S. Attorney for the Southern District of New York © Jeenah Moon/AP

“I thought of Damian as a real star in an office full of stars; very meticulous, thoughtful and a very skilled lawyer and communicator,” said Joon Kim, partner at Cleary Gottlieb and former SDNY acting U.S. attorney.

Kim chose Williams, who had been through the narcotics and securities divisions, to retry a corruption case against former New York State Assembly Speaker Sheldon Silver after a court of appeal overturned the first verdict. Kim said he recognizes someone who can “thoroughly and fairly investigate very complex cases and also bring those cases to justice.”

Williams, another former colleague said, had “gained luck,” having been “hyper-attentive to blocking and wrestling” that goes into building a case as he made his way to the top of the SDNY. An improvement in the data infrastructure for processing evidence, pushed by Williams, may have helped expedite the charges against Bankman-Fried, a former prosecutor said.

Yet unlike many of his predecessors, who fought with “mainstream justice” in Washington, Williams has the advantage of working under an attorney general he knows well, having served as clerk to Merrick Garland, then a judge on the DC Circuit Court of Appeals in 2007-2008.

While there’s no suggestion the relationship led to SDNY securing the Bankman-Fried case over rival districts, “Damian has to be careful with that relationship,” the former top SDNY official said, which has long prized its independence.

Given the frenzy surrounding the FTX affair, Williams’ tactic has already attracted attention. The bureau has come under fire for allowing Bankman-Fried to be released to his parents’ California home on a Bond of $250 millionwhile those charged with less serious crimes were denied bail in the district.

People familiar with the case said the deal was offered in order to ensure that Bankman-Fried consented to a speedy extradition from the Bahamas, and spoke of the SDNY’s determination to ensure that the accused – whose face is now globally recognizable – be brought to justice in New York. The same logic underpinned the deals with the lesser-known Wang and Ellison, the people said.

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

A conviction from Bankman-Fried would push Williams – who has thus far been among the more low-key denizens of his office – further into the limelight.

Discussions of the Democrat’s potential strengths as a candidate for elected office are, predictably, commonplace among political operatives. Beyond his record as a prosecutor, Williams’ story, including meeting his wife on a cheap intercity bus, would appeal to voters, a Democratic fundraiser said.

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

He “showed no signs” of pursuing overtly political affairs for their own good, the person said. The Acquittal of Trump ally Tom Barrack by a Brooklyn jury in November proved that such cases, while receiving media coverage, could sometimes be nonprofit efforts, they added.

The SDNY’s path to other national stages is well marked – Rudy Giuliani became mayor of New York and James Comey head of the FBI. But Williams’ friends said they had never heard him express ambitions beyond his current role.

“I always say I would do this job for free,” Williams said a room full of New York lawyers at an event last year. “There’s magic in there, for me.”

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