CryptoPeopleTrending News

FTX founder Sam Bankman-Fried arrested and charged with fraud

2 Mins read

Once an industry celebrity dubbed the “crypto whiz kid,” Sam Bankman-Fried is now detested by the whole crypto world. SBF was arrested at his home in the Bahamas on Monday, December 12. The 30-year-old is expected to appear in a Nassau court for an extradition hearing. Separately, he was also charged with defrauding investors by the United States Securities and Exchange Commission (SEC) on Tuesday, December 13.

The SEC claimed Bankman-Fried “orchestrated a years-long fraud” against investors and customers. The motive behind this was to conceal the diversion of FTX investor funds to Alameda Research, Bankman-Fried’s crypto trading house.

In a statement, SEC Chair Gary Gensler commented, “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.”

It is likely that the disgraced FTX founder will be facing multiple criminal charges. According to the SEC, Bankman-Fried is the target of other ongoing investigations. These encompass “other security law violations” in addition to other individuals and entities associated with SBF.

An indictment for Bankman-Fried was also unsealed on Tuesday in the Southern District of New York. It charges the one-time CEO with wire fraud and a laundry list of conspiracy charges. They include:

  • Conspiracy to defraud investors, lenders, and the United States
  • Commit commodities and securities fraud and money laundering
  • Violations of campaign finance laws

The Commodity Futures Trading Commission (CFTC) announced its own charges on the same day.

Prosecutors are alleging that Sam Bankman-Fried conspired with others, in multiple schemes, to misuse FTX customer deposits to cover Alameda’s expenses. He is also facing allegations of defrauding Alameda lenders by providing misleading information about the financial health of the hedge fund.

Ironically, SBF was previously heralded as a proponent of crypto regulation. He had the ear of several important government figures and even drafted a proposal of standards to protect customers, as United States lawmakers have not passed any such legislation.

Now, the SEC is accusing Bankman-Fried of defrauding investors by touting FTX as a “safe and reliable” trading platform that utilized “sophisticated and automated” processes to safeguard customer finances. Essentially, the SEC is claiming the FTX funds were providing a carte blanche “line of credit” to Alameda.

FTX filed for bankruptcy four weeks ago. Sam Bankman Fried has publicly admitted he “screwed up” but claims, “I didn’t knowingly commit fraud.” The United States Justice Department apparently disagrees with this assessment.

Related posts
NationTrending News

Chinese surveillance balloon spotted in American skies

2 Mins read
A suspected Chinese surveillance balloon spotted over American airspace for a couple of days is currently being tracked by the US Department…

Tom Brady announces retirement from football, this time “for good”

1 Mins read
Tom Brady, the legendary quarterback and seven-time Super Bowl champion, announced his second and final retirement from the NFL on Wednesday, February…

Greg Lindberg Shares Personal Struggles And Triumphs In New Memoir '633 Days Inside

2 Mins read
Entrepreneur, philanthropist, and author Greg Lindberg recently published his second book, “633 Days Inside: Lessons on Life and Leadership,” in which he…