Business
US Charges FTX CEO Sam Bankman-Fried With Defrauding Investors
(BBC)- The US Securities and Exchange Commission (SEC) has charged Sam Bankman-Fried with “orchestrating a scheme to defraud investors” in the failed cryptocurrency exchange FTX.
The former FTX boss was arrested on Monday.
Mr Bankman-Fried built a “house of cards on a foundation of deception” SEC Chair Gary Gensler said.
He added that the charges for alleged fraud were a warning for other platforms to comply with US laws.
Speaking to BBC News earlier this month, Mr Bankman-Fried sought to distance himself from accusations of illegal activity.
“I didn’t knowingly commit fraud. I don’t think I committed fraud. I didn’t want any of this to happen. I was certainly not nearly as competent as I thought I was,” he told BBC News cyber reporter Joe Tidy.
Mr Bankman-Fried also denied allegations he must have been aware FTX’s affiliated trading company, Alameda Research, was using FTX customer funds.
Billions invested
Since 2019, Bahamas-based FTX had raised more than $1.8bn (£1.46bn) from equity investors, the SEC said, including approximately $1.1 billion from about 90 US-based investors.
It is alleged that while Mr Bankman-Fried promoted FTX as a “safe, responsible crypto asset trading platform”, in reality he “orchestrated a years-long fraud” to conceal from FTX’s investors the diversion of FTX customers’ funds to Alameda Research LLC, his privately-held crypto hedge fund.
The SEC also alleges he concealed FTX’s exposure to Alameda’s significant holdings of overvalued FTX-affiliated tokens.
Mr Bankman-Fried is also accused of “co-mingling” FTX customers’ funds at Alameda to make “undisclosed venture investments, lavish real estate purchases, and large political donations”.
In what has turned out to be one of his last interviews before arrest, Mr Bankman-Fried seemed extremely confident – telling me he would not be arrested and was innocent of any criminal wrongdoing.
The 30-year-old turned up in his trademark shorts and scruffy T-shirt, seeming surprisingly calm.
But he did admit he was not getting much sleep since his empire collapsed and he became crypto public enemy number one.
Mr Bankman-Fried spoke to us not in his home but in an apartment still owned by FTX, in the luxury Albany complex about 30 minutes from Bahamian capital Nassau.
Before we started recording, we were told not to take any shots of the multimillion pound yachts or manicured gardens in the marina.
We were also warned not to film his apartment building, which he has had to vacate for “safety reasons”.
Once we began the interview Mr Bankman-Fried spoke for 35 minutes with no topic or question ruled out.
As in other recent interviews, he admitted to mismanaging his FTX empire but tried to distance himself from any criminal wrongdoing.
He also said he did not think he would be arrested and, off camera, heavily hinted details would soon emerge to make the public more believing of his version of events.
“FTX operated behind a veneer of legitimacy Mr. Bankman-Fried created,” said Gurbir S Grewal, director of the SEC’s Division of Enforcement.
“But as we allege in our complaint, that veneer wasn’t just thin, it was fraudulent.”
He added that FTX’s collapse highlighted the risk unregistered crypto asset trading platforms can pose to consumers and investors.
The SEC charged Mr Bankman-Fried with violating the anti-fraud provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934.
The U.S. Attorney’s Office for the Southern District of New York and the Commodity Futures Trading Commission (CFTC) also announced charges against Mr Bankman-Fried in parallel actions.
Kenya Insights allows guest blogging, if you want to be published on Kenya’s most authoritative and accurate blog, have an expose, news TIPS, story angles, human interest stories, drop us an email on [email protected] or via Telegram
KETRACO CEO Advert Marred By Controversies As Fears Grow That Kipkemoi Kibias Is A Predetermined Candidate
I Will Bribe Every Judge in Town- MP Jack Wamboka
KNH ON THE BRINK: How Corruption, Revenue Plunder and State Neglect Are Destroying Kenya’s Flagship Hospital
Receivers In TransCentury Sh6B KRA Tax Arrears Are Biased And Must Be Removed, COFEK Claims
The Man Behind the Badge: How Prof. Erastus Kanga Turned Kenya’s Premier Wildlife Agency into a Theatre of Corruption, Fear and Impunity
City Lawyer Conrad Maloba Arrested Over Fake Ambulance Fraud
THE FIXER IN THE FILE ROOM: How Parliamentary Health Committee Clerk Adan Gindicha Cleared Mediheal Hospital of Organ Harvesting Claims Despite Mounting Evidence
Nairobi Freezes Binance Accounts in Sweeping Anti-Fraud Crackdown as Global Scandal Record Haunts World’s Largest Crypto Exchange
EXCLUSIVE: Odibets Bought Stolen Data From Millions Of Kenyans
Taiwan President Cancels Trip After African Countries Close Airspace
Forged Legacy: How Kaplan and Stratton’s Peter Gachuhi Is Accused of Faking a Top AG’s Will as State Claims Damning Evidence
Inside Details Of Sh78 Billion Fraud in KPC’s Mombasa-Nairobi Line 5 Pipeline Project That Has Continued To Bleed The Country
The Lawyer at the Centre of Kenya’s State Machine: Eric Gumbo, the AG’s Bypassed Office, and the Half-Billion-Shilling Question
Sold And Abandoned: How Diageo and Asahi Are Locking Kenya’s EABL Minority Shareholders Out Of East Africa’s Biggest Corporate Heist
Poison at the Pump: How Kenya’s Fuel Marking System May Be Exposing Millions to Cancer-Causing Chemicals
How Firm Linked To Mombasa Tycoon Jaffer Was Allowed To Import Fuel At Bloated Price And Set To Make Billions In Profits From Iranian War Crisis In Kenya
THE ZAKHEM-ECOBANK MACHINE: How Kenya’s Courts Were Weaponised to Drain a State Corporation of Over KES 78 Billion
The Teflon Company: How Gulf Energy’s Insiders Built Billions on Kenya’s Fuel, and Walked Away Clean
Mombasa Lawyer Exposed In Sh600 Million Alleged Double-Dealing Diani Property Transaction
Kenyan Motorists Stare At Possible Engine Damage And Heavy Losses As Report Confirms Substandard Fuel In Circulation
-
Business2 weeks agoKenyan Motorists Stare At Possible Engine Damage And Heavy Losses As Report Confirms Substandard Fuel In Circulation
-
Business1 week agoTHE FUEL CABAL: How Mohamed Jaffer, a KPC Insider, and a Ministry Official Are Alleged to Have Manufactured Kenya’s Worst Petroleum Crisis in Three Years, While Kenyans Burned
-
Business2 weeks agoGetting Away With It: How Kenya’s Most Politically Connected Fuel Company Gulf Energy Is Pocketing Billions While Rival Firms Face Public Wrath
-
Business5 days agoNairobi Freezes Binance Accounts in Sweeping Anti-Fraud Crackdown as Global Scandal Record Haunts World’s Largest Crypto Exchange
-
Investigations5 days agoEXCLUSIVE: Odibets Bought Stolen Data From Millions Of Kenyans
-
Business2 weeks agoSugar Empire in the Dock: How Kibos’s Mombasa Refinery Landed 1,481 Phantom Tonnes at the Port — and Why Nine Government Agencies Are Now Watching Its Every Move
-
Investigations6 days agoTHE BRAZEN RETURN: Triton Thief Yagnesh Devani, Who Pillaged Kenya of Sh7.6 Billion and Fled, Now Asks the Same Courts He Escaped to Restore His Stolen Wealth
-
Investigations4 days agoTHE FIXER IN THE FILE ROOM: How Parliamentary Health Committee Clerk Adan Gindicha Cleared Mediheal Hospital of Organ Harvesting Claims Despite Mounting Evidence