The US Securities and Exchange Commission (SEC) claimed on Tuesday that former FTX chief executive Sam Bankman-Fried orchestrated a years-long scheme to defraud equity investors, raising more than $1.8 billion.
An SEC statement claimed the fallen crypto billionaire concealed both risks and FTX’s relationship with its trading firm Alameda Research – which he reportedly allowed to carry a negative balance on FTX and was exempt from the exchange’s risk protocols – and used commingled customer funds.
“We allege that Sam Bankman-Fried built a house of cards on a foundation of deception while telling investors that it was one of the safest buildings in crypto,” SEC Chair Gary Gensler said.