The US Commodity Futures Trading Commission, or CFTC, has filed a lawsuit against Sam Bankman-Fried, FTX and Alameda Research, alleging violations of the Commodity Exchange Act and demanding a jury trial.
According to court records filed December 13 in the Southern District of New York, the CFTC filed a lawsuit for injunctive and other equitable relief, as well as civil money penalties, against Bankman-Fried, FTX Trading and Alameda Research. The lawsuit alleged that SBF personally directed CFTC executives to put in place features that would allow Alameda to use the cryptocurrency exchange as a line of credit for its lenders.
“Contrary to representations [de Bankman-Fried] and without disclosure to FTX clients, Alameda and FTX commingled funds and freely used FTX client funds as their own, including as capital to deploy in their own trading and investment activities.”the CFTC said. “According to information and belief, Bankman-Fried, her parents, and other FTX and Alameda employees used FTX customer funds for a variety of personal expenses, including luxury real estate purchases, private jets, documented and undocumented personal loans and personal political donations.
Bahamian authorities arrested Bankman-Fried on December 12 following the filing of criminal charges in the United States – both countries have an extradition agreement. The United States Securities and Exchange Commission also filed charges against SBF on December 13, alleging violations of the anti-fraud provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934.
Before his arrest, Bankman-Fried was scheduled to testify before the House Financial Services Committee on December 13 about the bankruptcy of FTX. A leaked written testimony from the former CEO largely blamed him for the exchange’s downfall.
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