SEC Charges Crypto Mogul In Alleged Fraud Scheme

December 13, 2022 Business, Crime

Via press release from the SEC:

The Securities and Exchange Commission today 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.

According to the SEC’s complaint, since at least May 2019, FTX, based in The Bahamas, raised more than $1.8 billion from equity investors, including approximately $1.1 billion from approximately 90 U.S.-based investors. In his representations to investors, Bankman-Fried promoted FTX as a safe, responsible crypto asset trading platform, specifically touting FTX’s sophisticated, automated risk measures to protect customer assets.

FTX’s collapse highlights the very real risks that unregistered crypto asset trading platforms can pose for investors and customers alike. While we continue to investigate FTX and other entities and individuals for potential violations of the federal securities laws, as alleged in our complaint, today we are holding Mr. Bankman-Fried responsible for fraudulently raising billions of dollars from investors in FTX and misusing funds belonging to FTX’s trading customers.

The New York Times reports:



Federal prosecutors in Manhattan are expected to unseal a criminal indictment against Mr. Bankman-Fried on Tuesday, which is expected to charge him with wire fraud, wire fraud conspiracy, securities fraud, securities fraud conspiracy and money laundering.

The collapse of the FTX empire shocked the crypto world and has caused many investors to get to grips with not just the volatility of crypto assets but the security and safety of the platforms that crypto is traded on. FTX was one of the biggest exchanges in the world and spent extensively on advertising and marketing.

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