The U.S. Securities and Exchange Commission on Tuesday charged disgraced cryptocurrency tycoon Sam Bankman-Fried with defrauding clients out of billions of dollars, a day after he was arrested in the Bahamas at the request of the United States.
“Today we hold Mr. Bankman-Fried responsible for fraudulently raising billions of dollars from investors FTX and misuse of funds belonging to FTX’s trading clients,” the exchange said in a statement.
“We say so Sam Bankman Fried built a house of cards on a foundation of deception and told investors it was one of the most secure buildings in the crypto world,” said SEC Chairman Gary Gensler.
The statement added that investigations “are ongoing into other securities law violations and into other companies and individuals in connection with the alleged wrongdoing.”
Bankman-Fried’s FTX platform was hooked up by celebrities in ad campaigns, and the cyber genius became a regular presence in Washington, where he made tens of millions of dollars in political donations.
But after reaching a valuation of $32 billion, FTX’s implosion came quickly after a Nov. 2 report on ties between FTX and Alameda, a trading firm also controlled by Bankman-Fried.
The report revealed that Alameda’s balance sheet was heavily built on the FTT currency – a token created by FTX with no independent value.
