SEC charges SBF with defrauding investors

1 year ago

SEC states Sam Bankman-Fried “concealed his diversion of FTX customers’ funds to crypto trading steadfast Alameda Research portion raising much than $1.8 cardinal from investors
The Securities and Exchange Commission connected Dec. 13, complaint SBF with “orchestrating a strategy to defraud equity investors successful FTX Trading Ltd. (FTX)”
Since May, 2019, FTX raised implicit $1.8 cardinal from equity investors, “including $1.1 cardinal from astir 90 U.S.-based investors.”
The SEC ailment alleges SBF orchestrated a “years-long fraud to conceal from FTX’s investors”
(1) the undisclosed diversion of FTX customers’ funds to Alameda Research LLC, his privately-held crypto hedge fund;
(2) the undisclosed peculiar attraction afforded to Alameda connected the FTX platform, including providing Alameda with a virtually unlimited “line of credit” funded by the platform’s customers and exempting Alameda from definite cardinal FTX hazard mitigation measures; and:
(3) undisclosed hazard stemming from FTX’s vulnerability to Alameda’s important holdings of overvalued, illiquid assets specified arsenic FTX-affiliated tokens. The ailment further alleges that Bankman-Fried utilized commingled FTX customers’ funds astatine Alameda to marque undisclosed task investments, lavish existent property purchases, and ample governmental donations.
SEC complaint SBF with usurpation of anti-fraud provisions of the Securities Act 1933 and the Securities Exchange Act of 1934.

More details to come…