The United States Securities and Exchange Commission (SEC) sued the founder of the FTX cryptocurrency platformSam Bankman-Fried, whom he accuses of orchestrating a fraud against the investors of this company under a false facade of legitimacy.
Sam Bankman-Fried built a house of cards based on deception while telling investors it was one of the safest structures in cryptocurrency,” SEC Chairman Gary Gensler said in a statement.
Bankman-Fried was arrested Monday night in the Bahamas after New York Southern District Attorney Damian Williams charged him.
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The SEC adds that its investigations continue into other possible crimes committed by the disgraced young crypto entrepreneur.
We hold Bankman-Fried responsible for fraudulently raising billions of dollars from investors in FTX and embezzling funds belonging to FTX’s business clients,” Gensler said.
The fraud orchestrated by Bankman-Fried
The regulatory body said that since May 2019, FTX has raised $1.8 billion from investors. Of which, around 1,100 million were contributed by 90 investors based in the United States.
The SEC’s complaint insists that Bankman-Fried organized a fraud scheme for years to hide from FTX investors the diversion of client funds to investment company Alameda Research.dependent on FTX.
In this way, Alameda Research had a “credit line” that the SEC describes as virtually unlimited thanks to funds from platform clients and that exempted Alameda from certain key FTX risk mitigation measures.
In addition, Bankman-Fried did not disclose the risk arising from FTX’s exposure to significant holdings of Alameda’s overvalued and illiquid assets.
In addition, the SEC accused him of using funds from FTX clients in Alameda to make risky investments that were not disclosed. Also for luxury real estate purchases and extensive political donations.
The alleged fraud committed by Bankman-Fried is a wake-up call to cryptocurrency platforms about the need to comply with our laws,” added Gensler, who insisted on several occasions on the false “facade of legitimacy” created by the businessman.
The District Attorney for the Southern District of New York will charge you with wire fraud; securities fraud, securities fraud conspiracy and money laundering, according to the newspaper The New York Times.
EFE International news agency based in Madrid and present in more than 110 countries.