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The former billionaire, Sam Bankman-Fried, has been charged by the SEC for defrauding cryptocurrency investors. CBS News has more:
The U.S. Securities and Exchange Commission has charged the former CEO of failed cryptocurrency firm FTX with orchestrating a scheme to defraud investors.
An SEC complaint filed Tuesday alleges that Sam Bankman-Fried raised more than $1.8 billion from equity investors since May 2019 by promoting FTX as a safe, responsible platform for trading crypto assets.
The complaint says Bankman-Fried diverted customer funds to Alameda Research LLC, his privately held crypto fund, without telling them. The complaint also says Bankman-Fried commingled FTX customers’ funds at Alameda to make undisclosed venture investments, lavish real estate purchases and large political donations.
“FTX operated behind a veneer of legitimacy Mr. Bankman-Fried created by, among other things, touting its best-in-class controls, including a proprietary ‘risk engine,’ and FTX’s adherence to specific investor protection principles and detailed terms of service,” Gurbir S. Grewal, director of the SEC’s Division of Enforcement, in a statement. “But as we allege in our complaint, that veneer wasn’t just thin, it was fraudulent.”
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