A Democrat mega donor was arrested over fraud accusations that arose from a formal complaint on charges filed by the US against him.
The mega donor who is identified as Sam Bankman-Fried, the founder and former CEO of cryptocurrency exchange FTX was nabbed in Bahamas after being accused of defrauding the people.
The controversy arose from the formal notification sent by the US to the Bahamas government, accusing Bankman-Fried of a “massive, years-long fraud” which defrauded investors out of $1.8 billion through “a house of cards” that was built “on a foundation of deception.”
Bankman-Fried is known to Americans for being Democratic mega donor during the 2022 midterm elections.
According to the reports, the accused fraud spent more than $10 million to support US President Joe Biden in 2020. In 2021, Bankman-Fried also reportedly hired a network of political operatives and spent tens of millions more shaping Democratic House primaries.
🚨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
However, FTX Founder was nabbed on Monday night and is expected to face charges on Tuesday to be filed by the Southern District of New York attorney. The charges reportedly include wire fraud, wire fraud conspiracy, securities fraud, securities fraud conspiracy and money laundering.
In addition, while the 30-year old alleged crypto fraudster awaits his first appearance before the Bahamas magistrate, he was separately charged by the US Securities and Exchange Commission (SEC).
According to SEC Chair Gary Gensler, “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.
“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 declared.
The SEC also alleged 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 in the complaint.
Furthermore, the complaint also alleged that Bankman-Fried has “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 added.
“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,” SEC declared.
