FTX/Reuters
Sam Bankman-Fried has been charged with defrauding investors in his FTX cryptocurrency exchange, the Securities and Exchange Commission announced Tuesday.
The SEC’s complaint accuses the 30-year-old former billionaire of presenting his company, based in the Bahamas, to investors as a “safe, responsible crypto asset trading platform.” In reality, it’s alleged that Bankman-Fried ran a years-long fraud to divert FTX customers’ funds to a sister investment company, Alameda Research.
The SEC also accuses FTX of giving Alameda “undisclosed special treatment” which amounted to a “virtually unlimited ‘line of credit’” using FTX customers’ cash, and that Bankman-Fried also used the money to make “undisclosed venture investments, lavish real estate purchases, and large political donations.” He did this, the SEC claims, while raising over $1.8 billion from investors.