Monday, June 5, 2023

US Securities Commission Charges Sam Bankman-Fried With Defrauding Investors

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US Securities and Exchange Commission charged FTX founder Sam Bankman-Fried with defrauding investors of billions of dollars.

The US SEC filed a complaint on Tuesday alleging that the failed billionaire promoted FTX as a safe and responsible platform while raising more than $1.8 billion through FTX, but diverted the funds to his trading firm Alameda Research.

SEC Chair Gary Gensler said the crypto genius “built a house of cards on a foundation of deception while telling investors that it was one of the safest buildings in crypto.”

“FTX operated behind a veneer of legitimacy Mr. Bankman-Fried created by, among other things, touting its best-in-class controls, including a proprietary ‘risk engine,’ and FTX’s adherence to specific investor protection principles and detailed terms of service. But as we allege in our complaint, that veneer wasn’t just thin, it was fraudulent,” said Gurbir S. Grewal, Director of the SEC’s Division of Enforcement.

This comes after Bankman–Fried was arrested in the Bahamas on Monday evening at the request of the US Government. He is expected to be extradited to the USA to face a litany of fraud charges.

The 30-year-old has been a popular fixture in the media since the implosion of his crypto platform a month ago, apologizing for the ‘accounting errors’ as he claimed he did not commit fraud in one interview with New York Times.

Bankman-Fried is expected to face a judge today in the Bahamas to process his extradition.

US regulators signaled that other charges are pending stating that there are ongoing investigations into “other securities law violations” and into other entities and individuals.

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