The Limited Times

Now you can see non-English news...

Sam Bankman-Fried, founder of FTX, is charged with defrauding investors of $1.8 billion

2022-12-13T13:59:26.231Z


The Securities and Exchange Commission charges were filed in the Southern District of New York a day after Bankman-Fried was arrested in the Bahamas.


By Marlene Lenthang -

NBC News

Sam Bankman-Fried, the former CEO of cryptocurrency giant FTX, defrauded investors by funneling money into his private hedge fund, according to a complaint filed Tuesday by the United States Securities and Exchange Commission (SEC). Joined . 

The SEC charges were filed in the Southern District of New York one day after Bankman-Fried, the once-celebrity founder and CEO of FTX, was arrested in the Bahamas, and are separate from US criminal charges. .intends to submit. 

[Kanye West's clothing brand owes $600,000 in taxes to California]

The SEC said in a press release that Bankmen-Fried has raised more than $1.8 million from equity investors since founding Bahamas-based FTX in May 2019 and allegedly “orchestrated a year-long fraud to hide.” the undisclosed diversion of FTX client funds to its privately held cryptocurrency hedge fund Alameda Research LLC.

It also allowed undisclosed special treatment for Alameda on the platform, including a "virtually unlimited line of credit" funded by platform customers, and exempted Alameda from certain key FTC risk mitigation measures.

Cryptocurrency Giant FTX Files for Bankruptcy, Impacting Several Investments

Nov 13, 202202:10

He then allegedly used funds from FTX clients in Alameda "to make undisclosed venture investments, lavish real estate purchases, and large political donations."

“We allege that Sam Bankman-Fried built a house of cards on a basis of deception while telling investors it was one of the safest buildings in crypto,” SEC Chairman Gary Gensler explained.

According to authorities, other securities law violations related to the alleged misconduct are under investigation.

[A 'crypto crash' sinks digital currencies and the price of bitcoin plummets]

The SEC's complaint accuses Bankman-Fried of violating anti-fraud provisions of the securities law and seeks injunctive relief against future securities law violations, meaning that if convicted, he could be barred from trading in values ​​in the future beyond as an individual.

The SEC noted that the Commodity Futures Trading Commission has also filed charges against Bankman-Fried.

Sam Bankman-Fried, founder and CEO of the FTX Cryptocurrency Derivatives Exchange, during a Senate Agriculture, Nutrition and Forestry Committee hearing in Washington DC on Wednesday, February 9, 2022.Sarah Silbiger/Bloomberg via Getty Images

Bankman-Fried was detained after US authorities filed criminal charges against him and was taken into custody in the capital, Nassau, shortly before 6pm Monday.

He is expected to appear in court on Tuesday and US authorities are expected to request his extradition. 

Bahamas Prime Minister Philip Davis said in a statement that the island country is continuing the regulatory and criminal investigation into the bankruptcy of the company. 

[California issues executive order to study cryptocurrency regulation]

In its day, FTX was considered the face of the industry, a company valued at 32,000 million dollars that had the endorsement of celebrities and major sports sponsorships.

Bankman-Fried was seen as a cryptocurrency wunderkind who graced the covers of Forbes and Fortune and had become a major Democratic donor.

But last month, after a cryptocurrency-focused news site published the balance sheet of an investment firm also owned by Bankman-Fried, FTX experienced the equivalent of a bank run: customers and observers wondered if their loans and investments they were worth more than their debts.

They also questioned whether the company could pay those trying to withdraw funds. 

Within days, Bankman-Fried resigned and the company declared bankruptcy.

In his remarks at the New York Times DealBook Summit on November 30, Bankman-Fried said he "did not attempt to commit fraud against anyone."


Source: telemundo

All news articles on 2022-12-13

You may like

News/Politics 2024-03-28T16:35:20.974Z

Trends 24h

News/Politics 2024-03-28T06:04:53.137Z

Latest

© Communities 2019 - Privacy

The information on this site is from external sources that are not under our control.
The inclusion of any links does not necessarily imply a recommendation or endorse the views expressed within them.