SBF on suicide watch following charges in US. Bankman-Fried allegedly scammed investors out of $1.8 billion, according to the SEC. Co-founder of FTX “constructed a house of cards,” Gensler of the SEC claims that Sam Bankman-Fried is also the subject of US criminal proceedings. US authorities have charged FTX co-founder Sam Bankman-Fried with running a multi-year plan to swindle investors. Bankman-Fried, who was detained in the Bahamas on Monday and is now facing criminal charges in the US, reportedly raised over $1.8 billion from investors, according to the Securities and Exchange Commission.
The SEC also claimed he commingled customer assets and hid risks associated with FTX and his trading firm, Alameda Research. SEC Chair Gary Gensler said in a statement, “We allege that Sam Bankman-Fried created a house of cards on a foundation of lies while telling investors that it was one of the safest structures in crypto.” In a lawsuit filed in New York’s Southern District on Tuesday, the SEC alleged that Bankman-Fried had misused billions of dollars in consumer funds to expand his own businesses. According to the SEC’s complaint, FTX raised over $1.8 billion, including around $1.1 billion from roughly 90 investors in the United States, in an “orchestrated scheme to mislead equity investors” who bought it under the false assumption that FTX had adequate controls.
According to the complaint, Alameda Research was exempt from the risk standards of the FTX exchange and was permitted to have a negative balance there. According to the SEC, Bankman-Fried personally ordered that FTX’s “risk engine” not apply to Alameda and concealed the depth of the relationship between the two companies from investors. While FTX was unable to fulfill billions in withdrawal demands from consumers, the SEC said that Bankman-Fried continued to deceive investors as recently as last month. The filing of bankruptcy on November 11 by FTX and Alameda, according to the regulator, put an end to the practice.
The SEC wants to prevent Bankman-Fried from serving as an officer or director of a public corporation or selling any type of security, including cryptocurrency. The government is trying to get him to hand over his stolen money and property. After weeks of rumors that client funds were misappropriated prior to the fall of his empire, digital asset exchange FTX co-founder Sam Bankman-Fried was detained in the Bahamas after the US government filed a criminal indictment against him. Attorney General Ryan Pinder of the island nation said in a statement on Monday that Bankman-Fried is now in detention pending an extradition process.
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