US files fraud charges against FTX CEO Sam Bankman-Fried after his arrest

Collapsed cryptocurrency exchange platform FTX’s founder and CEO Sam Bankman-Fried (SBF) has been charged with defrauding investors by the US Securities and Exchange Commission (SEC). SBF was arrested from his residence in Bahamas on December 13 and has been accused of misusing funds of investors and diverting them toward outside ventures by the US regulator.

"We allege that Sam Bankman-Fried built a house of cards on a foundation of deception while telling investors that it was one of the safest buildings in crypto,” stated Gary Gensler, SEC Chair, as per The New York Times. According to the SEC, SBF lied to the investors who put in over $2 billion in his cryptocurrency exchange and misled them by telling them that their funds were safe. However, the entrepreneur instead was using the funds to support FTX's sister crypto trading platform, Alameda Research, buy real estate and even make political donations.

Moreover, the civil complaint by the SEC said that he, "was orchestrating a massive, years long fraud, diverting billions of dollars of the trading platform’s customer funds for his own personal benefit and to help grow his crypto empire." The trouble is expected to mount on SBF as he will further be charged with wire fraud, wire fraud conspiracy, securities fraud, securities fraud conspiracy and money laundering after the unsealing of a criminal indictment against him, The New York Times reported. 

SBF arrested weeks after filing for bankruptcy

SBF's company filed for bankruptcy on November 12 after being the world's third-biggest cryptocurrency exchange platform just a week before. According to reports, SBF's net worth was valued at $16 billion before he want bankrupt overnight. Just a few weeks after his fall, the Bahamian authorities arrested him at the request of the US Government. His arrest was "based on a sealed indictment filed by the United States Attorney’s Office for the Southern District of New York,” said US Attorney Damian Williams in a press statement.

Bahamas authorities would “promptly” extradite Bankman-Fried to the US once the indictment is unsealed and US authorities make a formal request for extradition, said Bahamian Attorney General Ryan Pinder in the official statement.