5.6 C
London
Friday, January 24, 2025

SEC charges Bankman-Fried with defrauding investors

Dec. 13 (UPI) — The Securities and Exchange Commission charged Sam Bankman-Fried, the founder of failed cryptocurrency exchange FTX, with defrauding investors on Tuesday.

The charges were filed in the Southern District New York and are separate from the criminal charges Bankman-Fried was arrested on yesterday.

Advertisement

The SEC alleged that Bankman-Fried “orchestrated a years-long fraud to conceal” the diversion of FTX customers’ funds into his privately held crypto hedge fund Alameda Research LLC. Bankman-Fried had raised more than $1.8 billion since May 2019.

He then used the funds at Alameda to purchase lavish real estate and make large political donations, the SEC said.

“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,” said SEC Chair Gary Gensler in a statement.

“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. Compliance protects both those who invest on and those who invest in crypto platforms with time-tested safeguards, such as properly protecting customer funds and separating conflicting lines of business.”

Advertisement

The SEC charged Bankman-Fried with violating anti-fraud provisions of securities law and seeks injunctions against future securities law violations, meaning if convicted, he could be banned from future securities trading.

On Monday Bankman-Fried was arrested at his Albany resort apartment, located in Nassau, Bahamas. He was taken into custody “without incident,” according to Royal Bahamas Police Force and will appear in Magistrate Court, Nassau, Bahamas, on Tuesday. Bankman-Fried is expected to be extradited to the United States.

Latest news
Related news

LEAVE A REPLY

Please enter your comment!
Please enter your name here