US charges FTX's Samuel Bankman-Fried with fraud

By Al Mayadeen English
Source: Agencies
13 Dec 2022 17:32
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The US says it charged Samuel Bankman-Fried with orchestrating a scheme to defraud equity investors in FTX.

FTX founder Samuel Bankman-Fried (Getty Images)

The US Securities and Exchange Commission confirmed on Tuesday that it has charged FTX founder Samuel Bankman-Fried with scheming to defraud equity investors in FTX Trading.

In a statement, the Commission said it "charged Samuel Bankman-Fried with orchestrating a scheme to defraud equity investors in FTX Trading Ltd. (FTX), the crypto trading platform of which he was the CEO and co-founder."

"Investigations as to other securities law violations and into other entities and persons relating to the alleged misconduct are ongoing," the statement read.

FTX, a cryptocurrency derivatives exchange, tanked in November as the result of a liquidity crisis that prompted multiple federal investigations.

It is alleged that the liquidity crisis was mostly due to affiliated trading firm Alameda using client funds to cover loans after the collapse of the Luna crypto network.

Earlier, Bankman-Fried has been arrested by the Bahamas police, according to the country's Attorney General, upon notification that the US is filing charges.

On Monday, the statement read, "The Office of the Attorney General of the Bahamas is announcing the arrest of... Sam Bankman-Fried, former CEO of FTX," adding that "SBF's arrest followed receipt of formal notification from the United States that it has filed criminal charges against SBF and is likely to request his extradition."

In November, Bankman-Fried resigned as the chief executive of FTX, according to the company. Before the company's downfall, he was in charge of the world's second-largest crypto exchange.

In a week, the FTX empire collapsed, shaking confidence in the crypto market.

"I'm really sorry, again, that we ended up here. Hopefully, things can find a way to recover," said Bankman-Fried, on his Twitter account. "I was shocked to see things unravel the way they did."

The former FTX CEO tried to organize a bailout but failed - this left FTX struggling to raise billions of dollars and many customers unable to retain their money.