{"id":57261,"date":"2022-12-14T09:26:15","date_gmt":"2022-12-14T08:26:15","guid":{"rendered":"https:\/\/crypto-economy.com\/?p=57261"},"modified":"2022-12-30T14:06:45","modified_gmt":"2022-12-30T14:06:45","slug":"sec-slaps-sam-bankman-fried-with-fraud-charges-just-a-day-after-his-arrest","status":"publish","type":"post","link":"https:\/\/crypto-economy.com\/sec-slaps-sam-bankman-fried-with-fraud-charges-just-a-day-after-his-arrest\/","title":{"rendered":"SEC Slaps Sam Bankman-Fried with Fraud Charges Just a Day After His Arrest"},"content":{"rendered":"

The US Securities and Exchange Commission (SEC) has charged beleaguered crypto exchange FTX founder, Sam Bankman-Fried (SBF) with defrauding investors and concealing that FTX was diverting customer funds to Alameda Research LLC.<\/strong><\/p>\n

This comes on the heels after SBF was arrested in the Bahamas after being criminally charged by the U.S. government. According to official press release<\/a><\/strong>, the SEC accused Bankman-Fried of masterminding a \u201cmassive, years-long fraud\u201d in which he allegedly diverted billions of dollars of the trading platform\u2019s customer funds for \u201chis own personal benefit.\u201d<\/p>\n

What are the Charges?<\/h2>\n

\"SEC<\/p>\n

The civil complaint which was filed in the Southern District of New York claimed that Bankman-Fried raised more than $1.8 billion<\/strong> from investors who bought an equity stake in the exchange believing that FTX had appropriate controls and automatic risk management.<\/p>\n

The SEC has further alleged Bankman-Fried with violating anti-fraud provisions, and demanding a set of orders that will prohibit him from handling securities professionally, disgorgement, civil penalties, and a bar from serving as an officer or director of a company<\/strong><\/a> moving forward. In a statement, SEC Chair Gary Gensler said,<\/p>\n

\u201cWe 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.\u201d<\/em><\/p>\n

Meanwhile, Gurbir S. Grewal, Director of the SEC\u2019s Division of Enforcement, asserted that FTX was a fraud from the very beginning with SBF personally borrowing more than $1.338 billion from Alameda, using customers\u2019 money for investments, real estate, and political donations.<\/p>\n

Grewal emphasized that Bankman-Fried projected FTX as a safe place to invest because of an automated \u201crisk engine\u201d<\/strong>, that would sell off a customer\u2019s assets to make sure their collateral stayed at the required levels. The Director added,<\/p>\n

\u201c<\/em>FTX operated behind a veneer of legitimacy Mr. Bankman-Fried created by, among other things, touting its best-in-class controls, including a proprietary \u2018risk engine.\u201d<\/em><\/p>\n

SBF in Dire Straits<\/h2>\n

The press release also mentioned that additional charges would be announced on Bankman-Fried by the U.S. Attorney’s Office for the Southern District for New York and the Commodity Futures Trading Commission.<\/p>\n

Earlier this month, SBF claimed in a live New York Times interview that he doesn’t personally think he has any criminal liability arguing,<\/p>\n

“I didn’t ever try to commit fraud\u201d.<\/em><\/p>\n

On November 11, FTX and its affiliates filed for bankruptcy on 11 November following a high octane drama that reverberated across the entire crypto ecosystem.<\/p>\n

\n

Letter SBF sent today to FTX employees h\/t @CoinDesk<\/a> pic.twitter.com\/YERO3yfKnI<\/a><\/p>\n

— Liz Hoffman (@lizrhoffman) November 22, 2022<\/a><\/p><\/blockquote>\n