The United States Securities and Exchange Commission (SEC) charged Sam Bankman-Fried aka SBF of organizing a plan to defraud equity investors in FTX Trading Ltd.
According to the SEC report, “Investigations as to other securities law violations and into other entities and persons relating to the alleged misconduct are ongoing.”
Both the Commodity Futures Trading Commission (CFTC) and the U.S. Attorney’s Office for the Southern District of New York also announced charges against the fallen Sam Bankman-Fried.
The Bahamas-based FTX has raised more than $1.8 billion from equity investors since May 2019 including roughly $1.1 billion from 90 or so investors in the United States.
Bankman-Fried highlighted FTX’s advanced, automated risk procedures to protect customer assets in his statements to investors as a secure, responsible platform for trading crypto assets.
According to the complaint, Bankman-Fried orchestrated a multi-year scam to conceal from FTX’s investors the undeclared transfer of FTX customers’ funds to his privately held crypto hedge fund, Alameda Research LLC, as well as giving Alameda access to a virtually limitless “line of credit” funded by the platform’s users and exempting Alameda from paying fees.
SEC Chair Gary Gensler stated “The alleged fraud committed by Mr. Bankman-Fried is a clarion call to crypto platforms that they need to come into compliance with our laws.”
Also Read: Sam Bankman-Fried Arrested in Bahamas, Set to be Extradited to US
Gurbir S. Grewal, Director of the SEC’s Division of Enforcement, stated “While we continue to investigate FTX and other entities and individuals for potential violations of the federal securities laws, as alleged in our complaint, today we are holding Mr. Bankman-Fried responsible for fraudulently raising billions of dollars from investors in FTX and misusing funds belonging to FTX’s trading customers.”
Additionally, the complaint alleges that Bankman-Fried used assets from FTX clients that were combined at Alameda to conduct hidden business, pay exorbitant real estate costs, and make substantial political contributions.
