Bankman-Fried used FTX client funds commingled in Alameda to make undisclosed venture investments, “luxury real estate purchases” and political donations, it said.
The Attorney’s Office for the Southern District of New York and the Commodity Futures Trading Commission will announce separate charges later Tuesday, according to the SEC.
Representatives for Bankman-Fried did not immediately respond to requests for comment.
The SEC said it will request his disqualification as CEO and director, as well as a sanction. It will also try to prevent you from participating in future purchases, offers and sales of securities, except for your personal account.
“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 said in a statement.
Bankman-Fried was arrested Monday night in the Bahamas and was expected to appear in court on Tuesday, marking his first in-person public appearance since the stunning collapse of FTX, which filed for bankruptcy in November after struggling to raise money when traders rushed to withdraw $6 billion from the platform in just 72 hours.
Bahamian police, where FTX was based, said Bankman-Fried, 30, was arrested on Monday in the exclusive Albany development in the capital, Nassau.
Damian Williams, US Attorney for the Southern District of New York, testified Monday afternoon that the arrest was made at the request of the US government and that the indictment against Bankman-Fried would be made public on Tuesday.
The Bahamas attorney general’s office said it expected him to be extradited to the United States.
It was not immediately clear what would happen at the hearing or whether Bankman-Fried would decide to oppose extradition, which could spark a high-flying battle.
The Bahamas police said in a statement that he was arrested for “various financial crimes against the laws of the United States, which are also crimes” in the Bahamas.
Bankman-Fried apologized to clients and acknowledged supervisory failures at FTX, but said he does not believe he has any personal criminal liability.
With information from Reuters
