A Democrat crypto fraud was arrested for allegedly defrauding his target market following a formal notification on charges filed by the United States against him.
According to the reports, the accused crypto crook Sam Bankman-Fried was nabbed in Bahamas after its government received the notification from the US, accusing the former of a “massive, years-long fraud” which have defrauded investors out of $1.8 billion through “a house of cards” that was built “on a foundation of deception.”
The FTX Founder was arrested on Monday night. The Southern District of New York attorney is also expected to charge him on Tuesday with wire fraud conspiracy, securities fraud, wire fraud, securities fraud conspiracy and money laundering.
In addition, the 30-year old alleged crypto fraudster was also separately charged by the US Securities and Exchange Commission (SEC) while awaiting his first appearance before a magistrate in the Bahamas.
In an official statement issued by SEC Chair Gary Gensler, he declared that “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.
🚨BREAKING: Sam Bankman-Fried has been arrested by Bahamian police following a “receipt of formal notification from the United States that it has filed criminal charges against SBF and is likely to request his extradition.” pic.twitter.com/xSSDWCwGwh
— Greg Price (@greg_price11) December 12, 2022
“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.” Gensler added.
In the civil complaint, the SEC claimed that “Bankman-Fried raised more than $1.8 billion from investors” who believed “that FTX had appropriate controls and risk management measures.”
“Unbeknownst to those investors (and to FTX’s trading customers), Bankman-Fried was orchestrating a massive, years-long fraud, diverting billions of dollars of the trading platform’s customer funds for his own personal benefit and to help grow his crypto empire,” the SEC added.
Moreover, the complaint further alleged that Bankman-Fried “portrayed himself as a responsible leader of the crypto community” and “touted the importance of regulation and accountability.”
“Customers around the world believed his lies, and sent billions of dollars to FTX, believing their assets were secure,” adding that Bankman-Fried also “placed billions of dollars of FTX customer funds into Alameda,” his privately held crypto fund, without telling them, the complaint alleges.
“He then used Alameda as his personal piggy bank to buy luxury condominiums, support political campaigns, and make private investments, among other uses. None of this was disclosed to FTX equity investors or to the platform’s trading customers,” the complaint reads.
