Sam Bankman-Fried has been conducting “brazen” years of fraud “from the beginning” on his bankrupt cryptocurrency exchange FTX. The U.S. Securities and Exchange Commission argued in charges announced Tuesday.
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civil litigation is Agency filed in the Southern District of New YorkBankman-Fried says it has raised more than $1.8 billion from investors who bought shares in the exchange, believing FTX has good controls and automated risk management. The filing alleges that the customer “believed his lies”, believed the platform’s safety, and then transferred billions of dollars to FTX.
The complaint was filed in federal court in Manhattan when authorities were notified that criminal charges had been filed against a 30-year-old man in the same New York court the day after Bankman-Fried was arrested in the Bahamas. . He is scheduled to appear in court in the Bahamas on Tuesday.
However, from the beginning, the SEC has alleged that Bankman-Fried improperly diverted client assets to Alameda Research, his privately held cryptocurrency hedge fund. He then allegedly used those clients’ money for “private venture investments, extravagant real estate purchases, and large political contributions.”
“While he was lavishing office space and condominiums in the Bahamas and pouring billions of dollars of client money into speculative venture investments, Bankman-Fried’s house of Trump began to fall apart.
According to the SEC, Bankman-Fried hid these actions from FTX’s equity investors, including US investors.
“He repeatedly asserted FTX as an innovative and conservative pioneer in the cryptocurrency market,” the complaint states.
“He reminds investors and prospective investors that FTX has first-class, sophisticated and automated risk management to protect client assets, that those assets are safe and secure, and that Alameda is a special privilege. They are simply platform customers who do not have
“These statements were false and misleading,” the complaint states.
US regulators have been heavily criticized by lawmakers for failing to stay ahead of the collapse of FTX. But the MP has thwarted his Gensler efforts to regulate Bankman-Fried and the wider industry for months leading up to spring 2022.
One of the loudest voices opposing Gensler was Congressman Tom Emmer (R-Minn). Emer signed a March 16 letter questioning the SEC’s authority to investigate “cryptocurrency and blockchain companies.” Emmer said he was one of Congress’ most vocal crypto advocates, benefiting from FTX-connected support, and that Bankman-Fried co-CEO Ryan Salame earned him $8,700 of campaign donations.
Still, Emmer claims Gensler did little to regulate the cryptocurrency market, despite questioning Gensler’s authority months ago.
Neither the SEC nor Emmer were immediately available to provide further comment.
