FTX’s Sam Bankman-Fried Charged by US SEC For Defrauding Investors Out of Billions of Dollars

The US Securities and Exchange Commission charged disgraced cryptocurrency tycoon Sam Bankman-Fried on Tuesday with defrauding customers out of billions of dollars, a day after he was arrested in the Bahamas at the request of the United States.

“Today we are holding Mr. Bankman-Fried responsible for fraudulently raising billions of dollars from investors in FTX and misusing funds belonging to FTX’s trading customers,” the exchange said in a statement.

“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,” said SEC Chair Gary Gensler.

The statement added investigations “as to other securities law violations and into other entities and persons relating to the alleged misconduct are ongoing.”

Bankman-Fried’s FTX platform was plugged by celebrities in advertising campaigns, and the cyber whiz kid became a regular presence in Washington, where he donated tens of millions of dollars in political contributions.

But after reaching a valuation of $32 billion, FTX’s implosion was swift following a November 2 report on ties between FTX and Alameda, a trading company also controlled by Bankman-Fried.

The report exposed that Alameda’s balance sheet was heavily built on the FTT currency — a token created by FTX with no independent value.