US Securities and Exchange Commission charges FTX founder Sam Bankman

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Crypto manager Bankman-Fried (in June 2021): under suspicion

Photo Credit: IMAGO/Matias J. Ocner / IMAGO/ZUMA Wire

Once considered a child prodigy in the crypto industry, the US Securities and Exchange Commission has now indicted crypto exchange FTX founder Sam Bankman-Fried for fraud.

The authority accuses the 30-year-old of misleading investors with false promises and embezzling their funds.

The SEC said it was worth more than $1.8 billion, around $1.1 billion of which came from the United States.

Other allegations are still under investigation.

"We contend that Sam Bankman-Fried built a house of cards on a foundation of deception," said SEC Chairman Gary Gensler.

Bankman-Fried was arrested the night before in the Bahamas, where his FTX crypto empire, which collapsed within days in November, was headquartered.

Criminal investigations are also underway in the USA against the operator of one of the formerly largest trading platforms for cryptocurrencies such as Bitcoin.

If extradited to the United States, Bankman-Fried faces a lengthy prison sentence.

An indictment from the New York prosecutor's office is still under wraps but is expected to be released on Tuesday.

Bankman-Fried's FTX group collapsed just over a month ago due to enormous withdrawals of funds in the wake of liquidity concerns.

Billions in customer funds could not be paid out.

Bankman-Fried, known only as SBF in the crypto industry, announced his resignation on November 11 and filed for bankruptcy for the group in the US state of Delaware.

In the US, class action lawsuits have been filed against Bankman-Fried by investors who feel cheated.

The young entrepreneur was considered a crypto prodigy and just a few months ago adorned the front pages of US business publications such as "Fortune".

In interviews, Bankman-Fried had denied the allegations of fraud and presented the FTX bankruptcy as an accident.

He also expressed remorse in an email to the workforce: "I didn't want that to happen.

And I would give anything to go back and change things.«

mic/dpa