US charges former FTX CEO with defrauding investors

San Francisco, Dec 13 (SocialNews.XYZ) Following his arrest in the Bahamas, US authorities on Tuesday officially charged former FTX CEO Sam Bankman-Fried with defrauding equity investors.

According to the US Securities and Exchange Commission (SEC) complaint, since 2019, FTX raised more than $1.8 billion from equity investors, including approximately $1.1 billion from approximately 90 US-based investors.

The SEC report said that Bankman-Fried promoted FTX as a safe, responsible crypto asset trading platform, specifically mentioning the platform's sophisticated, automated risk measures to the investors.

However, the complaint claims Bankman-Fried allegedly orchestrated a years-long fraud to conceal from FTX's investors.

"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," SEC Chair Gary Gensler said in a statement.

Moreover, the SEC complaint seeks an injunction prohibiting Bankman-Fried from participating in issuing, buying, offering or selling any securities, except on his own personal account, repayment of ill-gotten gains, civil penalties, and a bar on officers and directors.

"FTX operated behind a veneer of legitimacy Bankman-Fried created by, among other things, touting its best-in-class controls, including a proprietary 'risk engine', and FTX's adherence to specific investor protection principles and detailed terms of service," Gurbir S. Grewal, Director of the SEC's Division of Enforcement said in a statement.

"But as we allege in our complaint, that veneer wasn't just thin, it was fraudulent," he added.

FTX filed for bankruptcy last month after its possible merger with leading crypto exchange Binance did not materialise.

Source: IANS