The Securities and Exchange Commission (SEC) has just charged the founder and former CEO of crypto exchange FTX Sam Bankman-Fried with defrauding investors.

“The Securities and Exchange Commission today charged Samuel Bankman-Fried with orchestrating a scheme to defraud equity investors in FTX Trading Ltd. (FTX),” the Commission announced today.

The SEC alleged that Bankman-Fried “orchestrated a years-long fraud” when presenting his exchange’s “sophisticated, automated risk measure to protect customer assets.”

The complaint alleges that the FTX founder failed to disclose how the firm commingled funds with its sister trading firm Alameda Research, the “special treatment” afforded to Alameda, as well as using client funds for venture investments, political donations, and “lavish real estate purchases.”

“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,” SEC Chair Gary Gensler said. “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.”

Bankman-Fried was arrested yesterday in the Bahamas following a formal request from the U.S. Attorney’s Office for the Southern District of New York.

This story is breaking and will be updated shortly.

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