SEC files additional charges against accused crypto scammer and FTX CEO Sam Bankman-Fried – zoohousenews.com
(Natural News) As much trouble as Sam Bankman-Fried, the suspected crypto scammer and former CEO of now-defunct FTX, has, it’s not over for him thanks to the Justice Department’s indictments against him.
Now, the Securities and Exchange Commission is preparing to file additional charges against the accused thief and Democrat big donor, according to Wednesday reports.
In addition to trying to permanently ban SBF from the cryptocurrency industry, the SEC will also accuse him of “staging a plan to defraud investors in FTX,” charges that necessarily involve a conspiracy that – if found guilty – will only extend his prison sentence. according to a press release.
“Investigations into other violations of securities laws and into other companies and individuals in connection with the alleged wrongdoing are ongoing,” the press release said, adding:
According to the SEC’s complaint, Bahamas-based FTX has raised more than $1.8 billion from equity investors since at least May 2019, including about $1.1 billion from about 90 US-based investors. In his representations to investors, Bankman-Fried promoted FTX as a safe, responsible crypto-asset trading platform, specifically promoting FTX’s sophisticated, automated risk measures to protect client assets.
The complaint alleges that Bankman-Fried actually orchestrated a years-long scam to hide from FTX investors (1) the undisclosed diversion of FTX client funds to Alameda Research LLC, its private crypto hedge fund; (2) the undisclosed special treatment afforded to Alameda on the FTX platform, including the provision of a virtually unlimited “line of credit” funded by the platform’s customers and the exemption of Alameda from certain key FTX risk mitigation measures; and (3) undisclosed risk arising from FTX’s exposure to Alameda’s significant holdings of overvalued, illiquid assets such as FTX tokens.
The complaint further alleges that Bankman-Fried used the funds of blended FTX clients at Alameda to make secret venture investments, lavish real estate purchases and large political donations.
SEC Chairman Gary Gensler provided additional details on his agency’s enforcement against SBF.
“We contend that Sam Bankman-Fried built a house of cards on a foundation of deception while telling investors it was one of the most secure buildings in crypto,” he said, according to the press release. “Mr Bankman-Fried’s alleged fraud is a wake-up call to crypto platforms that they must comply with our laws.
“Compliance protects both those who invest in crypto platforms and those who invest in crypto platforms with proven safeguards, such as: B. the proper protection of customer funds and the separation of conflicting lines of business. It also sheds light on the behavior of trading platforms both to investors through disclosure and to regulators through audit bodies. For those platforms that fail to comply with our securities laws, the SEC’s Enforcement Division stands ready to take action,” Gensler noted.
“The collapse of FTX underscores the very real risks that unregistered crypto asset trading platforms can pose to investors and clients alike,” Grewal further noted. “As we continue to investigate FTX and other companies and individuals for possible violations of federal securities laws as alleged in our complaint, today we hold Mr. Bankman-Fried responsible for fraudulently collecting billions of dollars from investors in FTX and misusing funds has been among the trading clients of FTX.”
In addition to charges from the SEC and the Department of Justice, Bankman-Fried also faces charges from the Commodity Futures Trading Commission. SBF is accused of violating the anti-fraud provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934.