SEC charges disgraced FTX founder for ‘massive’ fraud

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The Securities and Exchange Commission announced they have brought charges against Samuel Bankman-Fried for allegedly violating the Securities Act and the Securities Exchange Act.

The complaint, filed Tuesday, accuses Bankman-Fried of carrying out "a scheme to defraud equity investors in FTX Trading Ltd," his cryptocurrency trading platform. The court filing describes the alleged operation as "a massive, years-long fraud."

"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. "The alleged fraud committed by Mr. Bankman-Fried is a clarion call to crypto platforms that they need to come into compliance with our laws. Compliance protects both those who invest on and those who invest in crypto platforms with time-tested safeguards, such as properly protecting customer funds and separating conflicting lines of business. It also shines a light into trading platform conduct for both investors through disclosure and regulators through examination authority. To those platforms that don’t comply with our securities laws, the SEC’s Enforcement Division is ready to take action."