Sam Bankman-Fried has been accused by the US Securities and Exchange Commission (SEC) of “orchestrating a conspiracy to mislead investors” in the defunct cryptocurrency exchange FTX.
On Monday, the former FTX CEO was taken into custody.
According to SEC Chair Gary Gensler, Mr. Bankman-Fried constructed a “house of cards on a foundation of lies.”
He continued by saying that the alleged scam served as a reminder to other platforms to abide by US laws.
The SEC reported that since 2019, FTX, domiciled in the Bahamas, had raised more than $1.8 billion (£1.46 billion) from equity investors, including roughly $1.1 billion from nearly 90 US-based investors.
While Mr. Bankman-Fried allegedly promoted FTX as a “safe, responsible crypto asset trading platform,” it is alleged that in reality he “orchestrated a years-long fraud” to hide from FTX’s investors the redirection of FTX customers’ funds to Alameda Research LLC, his privately-held crypto hedge fund.
The SEC claims that he disclosed Alameda’s significant holdings of inflated FTX-affiliated coins, which exposed FTX to exposure.
The SEC claims that he disguised Alameda’s significant holdings of inflated FTX-affiliated coins, which exposed FTX to exposure.
Additionally, Mr. Bankman-Fried was charged with “co-mingling” FTX clients’ money at Alameda to pay “undisclosed business investments, extravagant real estate acquisitions, and significant political donations.”
According to Gurbir S Grewal, director of the SEC’s Division of Enforcement, “FTX operated behind a façade of respectability Mr. Bankman-Fried established.”
However, as we claim in our complaint, the veneer was not only thin but also false too.
He also highlighted that the failure of FTX brought to light the danger that consumers and investors may face from unregulated crypto asset trading platforms.
The Securities and Exchange Commission (SEC) accused Mr. Bankman-Fried of breaking the securities law and the 1934 securities exchange act’s anti-fraud provisions.
Additionally charging Mr. Bankman-Fried in concurrent cases were the U.S. Attorney’s Office for the Southern District of New York and the Commodity Futures Trading Commission (CFTC).
Another gaming-related incident has appeared online since the 30-year-stunning old’s bitcoin empire crumbled.
In a blog post, the world’s largest venture capital firm Sequoia Capital said that Mr. Bankman-Fried engaged in a stressful League of Legends match with their investment team during a high-level video chat.
But it didn’t appear to bother them at all. The firm then invested $210 million in Mr. Bankman-business, Fried’s FTX.
Since then, Sequoia Capital has deleted the euphoric blog post and declared that it will now write off its stake in FTX as a loss.
Since Mr. Bankman-$32 Fried’s billion empires crumbled, the firm is not the only investor to have lost eye-watering sums of money.
FTX has an estimated 1.2 million registered customers who were utilising the exchange to purchase cryptocurrencies like Bitcoin and hundreds of others.
From large traders to everyday crypto fans, many are left wondering if they will ever get back their savings trapped in FTX’s digital wallets.
It’s a startling descent, and Mr. Bankman-ascent Fried’s is also a dramatic tale of rewards, dangers, and beanbags.
Mr. Bankman-Fried attended MIT, a famous research university in the US, to study physics and mathematics.
The young, intelligent undergrad claims, however, that it was lessons he gained during living in the residence halls that set him on his route to success.
