Sam Bankman-Fried: Former FTX Boss Accused of Defrauding Investors | Tech News

The former boss of one of the world’s largest cryptocurrency exchanges has been accused of defrauding investors of $1.8bn (£1.5bn).

Sam Bankman-Fredfounder of SoarHas been sued by the US Securities and Exchange Commission (SEC).

Have Arrested in the Bahamas Separate criminal charges were filed against him in the United States after authorities received formal notification.

The 30-year-old, who has a net worth of $26bn (£21bn), ran the company from the island until his resigned as chief executive last month.

According to the SEC complaint, Bankman-Fried transferred client funds to his first firm, Alameda Research, without telling it.

Funds amassed in Alameda were allegedly used to make undisclosed venture capital investments, lavish property purchases and large political donations.

“We allege that Sam Bankman-Fried built a house of cards based on deceit while telling investors it was one of the safest structures in cryptocurrency,” said SEC Chairman Gary Gensler.

How did we get here?

Regarding the separate charges leading to his arrest in the Bahamas, those charges are expected to be released at a later date.

Bankman-Fried has the right to challenge his extradition to face them.

The charges came a day before he was scheduled to testify before the U.S. House Financial Services Committee.

Bankman-Fried has been the focus of investigations by U.S. and Bahamian authorities since the collapse of FTX, which ran out of the cryptocurrency equivalent of a bank run.

It was once the world’s second-largest cryptocurrency exchange, but teetered on the brink of bankruptcy in early November when bigger rival exchange Binance surged dramatically Withdrew from non-binding bailout offer.

Binance also said it would sell $529 million (£430 million) worth of FTT, FTT’s native token, on its books

FTX’s FTT token has plummeted in value over the past month. Image: CoinMarketCap
FTX’s FTT token has plummeted in value over the past month. Image: CoinMarketCap

This caused other investors to rush to withdraw their funds, but FTX was unable to meet all demands, as it apparently used customers’ deposits to cover the wrong bets in Alameda.

In a string of recent media appearances, Bankman-Fried insisted he did not “intentionally” misuse client funds and denied defrauding investors.

However, he admitted that “obviously I’m not doing a good job” in running FTX.

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