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SEC charges ex-FTX boss for defrauding investors

Sam Bankman-Fried, the CEO of the bankrupt cryptocurrency exchange FTX, is being prosecuted by the United States Securities and Exchange Commission (SEC).

Sam Bankman-Fried, the CEO of the bankrupt cryptocurrency exchange FTX, is being prosecuted by the United States Securities and Exchange Commission (SEC).

In its complaint against Bankman-Fried, the SEC alleges that the company broke the anti-fraud provisions of both the Securities Act of 1933 and the Securities Exchange Act of 1934. Bankman-Fried is barred from participating in the issuance, acquisition, offer, or sale of any securities for any reason other than his account, as requested by the SEC in its lawsuit seeking injunctions against future violations of securities law.

Bankman-Fried is accused by the SEC of leading a plan to defraud FTX Trading Ltd.’s equity investors (FTX). While raising over $1.8 billion from investors, the former CEO diverted assets from FTX clients to crypto trading firm Alameda Research, according to the regulatory agency.

According to Gary Gensler, the head of the Securities and Exchange Commission, “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.”

Just one day after his detention by Bahamian officials at the behest of U.S. authorities, the former CEO is now facing additional charges. Minutes after Bankman-Fried was taken into custody in the Bahamas, the Securities and Exchange Commission (SEC) said that it was ready to file charges against the FTX co-founder, which would be distinct from those that led to his recent detention.

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