—Sam Bankman-Fried is expected to answer to the House Financial Services Committee on fraud charges.
—The US SEC has decided to sue the FTX co-founder and former CEO, and will likely bring more charges against him.
—Bankman-Fried is accused of running a business he knew would fail and diverting invested funds.
FTX co-founder and former CEO Sam Bankman-Fried is set to face securities fraud charges brought against him by the US Securities and Exchange Commission (SEC) after he was arrested in the Bahamas on Monday.
Bankman-Fried has been under scrutiny since his crypto exchange went under in November 2022. In the beginning, he denied misappropriating funds and made it all to seem like a business that went bad.
He has been going for interviews, Twitter Spaces, virtual chats and so on to talk about the FTX bankruptcy filing. However, the SEC is not having any of that. The securities fraud charge is just one of the many that they plan to bring against the 30-year-old.
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The Federal body claimed, in its complaint, that the former FTX boss had been diverting customers’ funds for years, using portions for investments in Alameda Research, real estate and donations to politicians.
“From the inception of FTX, Bankman-Fried diverted FTX customer funds to Alameda, and he continued to do so until FTX’s collapse in November 2022,” part of the SEC complaint read.
SEC Chair Gary Gensler added that the crypto exchange platform was a house of cards and that Sam Bankman-Fried lied to investors about the risks of the company. The House Financial Services Committee is holding a hearing for him to testify remotely alongside FTX new head, John J. Ray III.
The ripples of FTX collapse has been severe for the crypto world with rivals Crypto.com and Binance having to do all they can to put out fires of doubts while reassuring investors and customers of the safety of their funds.
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