All eyes on Crypto as Sam Bankman-Fried of FTX is charged with fraud

Sam Bankman-Fried, the former CEO and co-founder of FTX was arrested yesterday in the Bahamas. In a series of civil and criminal charges filed in the Southern District of New York against Mr. Bankman-Fried, it is said that he repeatedly lied to customers, investors, and lenders about how his business empire was set up and how he handled the billions of dollars that crypto users put in his exchange.

The collapse of FTX showed that SBF and his associates may have used customer deposits with FTX to support his other business, the trading firm Alameda Research. When a run on FTX showed that it didn’t have enough money to pay back customers, it quickly shut down.

The SEC announced that it charged Bankman-Fried “with orchestrating a scheme to defraud equity investors in FTX Trading” and that investigations into “other securities law violations and into other entities and persons relating to the alleged misconduct are ongoing.” The Commodity Futures Trading Commission (CFTC), a US government agency that oversees derivatives markets, has also filed charges against Bankman-Fried, the SEC said.

Bankman-Fried was previously scheduled to testify today at a Congressional hearing on FTX’s collapse. But he was arrested yesterday in the Bahamas and is now waiting for possible extradition. The Bahamas’ attorney general’s office said in a statement that the US is likely to ask for extradition and that the Bahamas plans to deal with the expected request. “promptly, pursuant to Bahamian law and its treaty obligations with the United States.”

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