In a recent press release, the SEC announced that it has charged Sam Bankman-Fried, the former CEO of FTX, with defrauding investors, who was arrested late Monday in the Bahamas.
According to the SEC, SBF had orchestrated a “years-long” fraud to conceal several things from FTX’s investors, such as:
“(1) the undisclosed diversion of FTX customers’ funds to Alameda Research LLC, his privately-held crypto hedge fund; (2) the undisclosed special treatment afforded to Alameda on the FTX platform, including providing Alameda with a virtually unlimited “line of credit” funded by the platform’s customers and exempting Alameda from certain key FTX risk mitigation measures; and (3) undisclosed risk stemming from FTX’s exposure to Alameda’s significant holdings of overvalued, illiquid assets such as FTX-affiliated tokens.”
Additionally, the US Attorney’s Office or the Southern District of New York and the Commodity Futures Trading Commission (CFTC) also announced charges against Mr.Bankman-Fried in parallel actions, as per the SEC.
This article originally appeared on The Tokenist
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