Breaking: US SEC Charges SBF Of Defrauding Investors, Political Donations

SBF Arrest Update: The U.S. Securities and Exchange Commission (SEC) in a release mentioned that it has pressed multiple charges against Sam Bankman-Fried (SBF), former CEO of collapsed crypto exchange, FTX. However, SBF was arrested in the Bahamas a day before he was due to testify before Congress.

SBF ran a fraud scheme?

As per the release, the commission has accused SBF of organizing a scheme to defraud equity investors via FTX trading Ltd. He also violated other securities law violations and into other entities. While SBF has also been accused of defrauding equity investors, using billions of dollars of customer funds for undisclosed venture capital.

However, SEC’s allegation list doesn’t end here as SBF has also been accused of large scale real estate purchases, and massive political donations. The release mentions that FTX based in the Bahamas raised more than $1.8 billion from equity investors since at least May 2019. This includes approx $1.1 billion from around 90 US based investors.

How does FTX ex-CEO cheat investors?

As per SEC, FTX’s former CEO promoted FTX as safe and a responsible digital asset trading platform. It is alleged that SBF organized a years long fraud and hide it from the investors. He didn’t disclose the diversion of FTX customers’ funds to its sister firm, Alameda Research.

SBF gave special treatment to Alameda Research on its crypto exchange. This includes giving Alameda an unlimited line of credit. While he didn’t disclose the risk related to FTX’s exposure to Alameda’s holdings.

Meanwhile, FTX’s former CEO allegedly used customers’ funds at Alameda in order to make several venture investments. He purchased lavish real estate while giving out huge political donations.