SEC Indicts Former FTX CEO Sam Bankman-Fried for Crypto Investor Fraud

The U.S. Securities and Exchange Commission has indicted the former CEO of bankrupt cryptocurrency firm FTX for organizing a scheme to defraud investors.

Sam Bankman-Fried has made $1.8 billion from equity investors since May 2019 by promoting FTX as a safe and responsible platform for trading crypto assets, according to an SEC complaint filed on Tuesday. Claims to have procured more than

The lawsuit alleges that Bankman-Fried diverted client funds without permission to Alameda Research LLC, his privately held cryptocurrency fund. The complaint also alleges that Bankman-Fried mixed money from his FTX clients in Alameda to make undisclosed venture investments, extravagant real estate purchases and large political contributions.

“FTX operates under the guise of legitimacy created by Mr. Bankman-Fried, touting, among other things, best-in-class controls, including its own ‘risk engine,’ which FTX believes to be consistent with certain investor protection principles. It advertises adherence to detailed terms of service. Gurbir S. Grewal, Director of the SEC’s Enforcement Division, said in a statement. “But as we allege in our complaint, the veneer wasn’t just thin, it was a fraud.”

Bankman-Fried is Arrested in the Bahamas on Monday At the request of the U.S. government, U.S. and Bahamian officials said.

SEC Chairman Gary Gensler claims that Sam Bankman-Fried built the House of Cards based on a scam and told investors it was one of the safest buildings in cryptocurrency. I am doing,” he said.

The agency seeks to recover what it calls “wrongfully earned gains” from Bankman-Fried and is seeking civil penalties, among other remedies.

Justice Department calls for independent investigation into FTX collapse


The arrests came after the U.S. filed criminal charges that are expected to be unsealed on Tuesday, according to U.S. Attorney Damian Williams.Bankman-Fried filed for bankruptcy on Nov. 11. It was under criminal investigation by US and Bahamian authorities after FTX’s collapse last month.

The SEC charges are separate from criminal charges expected to be unsealed later Tuesday. In parallel, the U.S. Attorney’s Office for the Southern District of New York and the Commodity Futures Trading Commission also announced charges against him Bankman-Fried.

FTX used to be one of the world’s largest cryptocurrency exchanges collapsed last monthUsers withdrew nearly $5 billion in crypto assets in a single day amid growing concerns over the exchange’s solvency. Bankman-Fried resigned on his November 11th and FTX filed for Chapter 11 bankruptcy protection.

Before Bankman-Fried was arrested, he was scheduled to appear before a House panel on Tuesday to answer questions about the collapse of FTX.In testimony prepared for the hearing, new FTX CEO John J. Ray III said FTX: “We failed to implement virtually all the systems and controls necessary for a company entrusted with the money and assets of others.” SEC Indicts Former FTX CEO Sam Bankman-Fried for Crypto Investor Fraud

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