Founder of cryptocurrency firm FTX charged with fraud

The Securities and Exchange Commission (SEC) on Tuesday charged the founder of cryptocurrency firm FTX with defrauding investors. The SEC’s charges against former FTX CEO Sam Bankman-Fried are in addition to separate criminal charges that led to his arrest Monday night by police in the Bahamas. FTX filed for bankruptcy last month after about a million depositors were unable to access their funds. The SEC is accusing Bankman-Fried of diverting customer assets to his privately-held crypto fund without telling them. The SEC complaint also alleges that he lied to investors by calling the firm one of the safest, most responsible crypto firms with sophisticated security.

What has Bankman-Fried said? Bankman-Fried has said he did not knowingly commit fraud. He has made mistakes and risky investments, he said, but he believes the millions of customers will eventually be made whole. Bankman-Fried was held by Bahamian authorities Tuesday. He has the right to contest his extradition but that will likely not stop his transfer to the United States, since the two countries have an extradition agreement. 

Dig deeper: Read Eric Erickson’s column in WORLD Opinions on Bankman-Fried’s reaction to the allegations.