>
BREAKING: SEC charges shamed Sam Bankman-Fried for defrauding FTX equity investors out of $1.8BILLION by diverting funds to a private crypto hedge fund calling it a ‘house of cards on a basis of deception’
- The SEC said it would seek an injunction to prevent SBF from trading securities in the future.
- The statement added that the separate charges would be announced today by other agencies.
- The news comes the day after SBF was arrested by local police in the Bahamas.
<!–
<!–
<!–<!–
<!–
<!–
<!–
The Securities and Exchange Commission charged Sam Bankman-Fried with defrauding FTX equity investors out of $1.8 billion, in what regulators called “a house of cards on a basis of deception.”
The embarrassed businessman and founder of cryptocurrency exchange FTX is accused of diverting funds to a privately owned cryptocurrency hedge fund.
In a statement, the SEC said it would seek an injunction to prevent Bankman-Fried from trading future securities except for his personal account and a civil penalty, among other actions. The US Attorney’s Office for the Southern District of New York and the Commodity Futures Trading Commission will announce separate charges later Tuesday, the SEC said.
The news comes the day after he was arrested by local police in the Bahamas, acting on behalf of the US. The billion-dollar empire collapsed last month.
The Securities and Exchange Commission charged Sam Bankman-Fried (pictured) with defrauding FTX equity investors out of $1.8 billion
“Today we hold Mr. Bankman-Fried accountable for fraudulently raising billions of dollars from investors in FTX and embezzling funds belonging to FTX’s trading clients,” the exchange said in a statement on Tuesday.
SEC Chairman Gary Gensler said: “We allege that Sam Bankman-Fried built a house of cards on a basis of deception while telling investors it was one of the safest buildings in crypto.”
“The alleged fraud committed by Mr. Bankman-Fried is a wake-up call to crypto platforms that they must comply with our laws.”
The statement added that investigations “into other securities law violations and into other entities and individuals related to the alleged misconduct are ongoing.”
News of the charges marks the latest twist since the rapid collapse of the SBF digital currency exchange, which until recently was worth tens of billions of dollars.
Just hours before his arrest on Monday, Bankman-Fried shrugged off the threat of detention by US authorities.
He spoke to interviewers from the Unusual Whale platform, who grilled him on a variety of topics, including his plans to testify remotely before Congress on Tuesday.
He said it was the threat of paparazzi and a busy newspaper that kept him away, not the fear of being arrested on American soil.
“I don’t think it is, but I haven’t dove deep into it,” he replied, confidence giving way to hesitation.
“At some point it’s something I have to think about more.”
Bankman-Fried’s FTX platform was plugged in by celebrities in ad campaigns, and the cyber whiz kid became a regular presence in Washington, donating tens of millions of dollars in political contributions.
But after hitting a $32 billion valuation, FTX’s implosion was swift following a Nov. 2 report about ties between FTX and Alameda, a trading company also controlled by Bankman-Fried.
The report exposed that Alameda’s balance sheet was largely based on the FTT coin, a token created by FTX with no independent value.
This is breaking news. More to follow…