US authorities accused the founder of the FTX crypto exchange of defrauding investors
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US Securities and Exchange Commission (SEC) put forward formal accusations against the founder of the bankrupt cryptocurrency exchange FTX, Sam Bankman-Freed. Authorities accuse the former CEO of running a scheme to defraud FTX investors who invested a total of $1.8 billion in the exchange. The SEC statement notes that the investigation into FTX and its subsidiaries is ongoing and authorities may bring additional charges against Sam Bankman-Fried.
As noted in the statement of claim, the founder of FTX secretly transferred client funds to the accounts of his other company, the trading platform Alameda Research. In addition, the lawsuit notes that the defendant used the funds of investors in venture capital investments, as well as to purchase expensive real estate and large political donations.
Finally, the SEC claims that despite the complex structure of the FTX Group, which includes about a hundred subsidiaries, it was Sam Bankman-Fried who exercised actual control over the investment and operating activities of the entire business empire, even despite the presence of other top managers.
Parallel to the SEC lawsuit, the New York Attorney’s Office and the US Commodity Futures Trading Commission (CFTC) filed their own allegations against Sam Bankman-Fried today.
Sam Bankman-Freed was arrested today by Bahamas law enforcement at the request of the US.
FTX Group, operator of the Bahamas-listed cryptocurrency exchange FTX, filed for bankruptcy on November 11. At the same time, Sam Bankman-Fried’s departure as CEO was announced, and the company itself came under external management. The bankruptcy procedure is handled by the new head of the company, John Ray, who has extensive experience in dealing with bankruptcies, including the energy company Enron.
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