The FTX founder, who was arrested in the Bahamas on Monday, has been accused of defrauding FTX’s investors and customers by the SEC in its lawsuit.
FTX founder Sam Bankman-Fried “engaged in a scheme to defraud” the crypto exchange’s investors and customers while diverting billions to shore up his personal wealth, the U.S. Securities and Exchange Commission alleged in a
on Tuesday, following the former billionaire and cryptocurrency mogul arrest in the Bahamas on Monday evening.... [+] hearing titled Changing Market Roles: The FTX Proposal and Trends in New Clearinghouse Models, in Longworth Building.filed with the Southern District of New York federal court, the SEC alleges that Bankman-Fried “improperly diverted” FTX’s customer funds to Alameda Research—his privately-held crypto-focussed hedge fund.
The FTX founder used the diverted funds to make venture investments, purchase expensive real estate and make large political donations without customers’ knowledge, the suit alleges. The SEC also accuses Bankman-Fried of hiding all of these moves from the crypto exchange’s equity investors while telling them that FTX had “sophisticated automated risk measures in place to protect customer assets.”
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