SEC charges Sam Bankman-Fried with defrauding FTX equity investors

‘House of cards on foundation of deception’: SEC charges shamed Sam Bankman-Fried with defrauding FTX equity investors out of $1.8BILLION by diverting funds to privately-held crypto hedge fund

The Securities and Exchange Commission has charged Sam Bankman-Fried with defrauding FTX equity investors out of $1.8 billion, in what regulators called ‘a house of cards on a foundation of deception’.

The shamed entrepreneur and founder of cryptocurrency exchange FTX is accused of diverting funds to a privately-owned crypto hedge fund.

In a statement, the SEC said it would seek an injunction to prevent Bankman-Fried from future securities trading except for his personal account and a civil penalty, among other actions. Separate charges would be announced by the U.S. Attorney’s Office for the Southern District for New York and the Commodity Futures Trading Commission later on Tuesday, the SEC said.

The news comes the day after he was arrested by local police in the Bahamas, acting on behalf of the U.S. Earlier, it was reported that American officials are ‘likely to request his extradition’ from the Caribbean, where he has been hiding since his $32 billion empire came crashing down last month.

‘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,’ the exchange said in a statement on Tuesday. 

SEC Chair Gary Gensler 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.

‘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.’

This is a breaking news story. More to follow… 

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