Government officials unveiled the details of the charges against embattled cryptocurrency mogul Sam Bankman-Fried Tuesday morning after authorities arrested him in the Bahamas.
The Securities and Exchange Commission said that it charged Bankman-Fried, known as SBF, with fraudulent behavior. These charges were echoed in parallel actions by the Southern District of New York’s Attorney’s office and the Commodity Futures Trading Commission.
“We allege that Sam Bankman-Fried built a house of cards on a foundation of deception while telling investors that it was one of the safest buildings in crypto,” said SEC Chairman Gary Gensler in a press release. “The alleged fraud committed by Mr. Bankman-Fried is a clarion call to crypto platforms that they need to come into compliance with our laws.”
The SEC complaint alleges that SBF had promoted the platform as a “safe, responsible crypto asset trading platform.” However, the crypto mogul had also “orchestrated a years-long fraud” to hide the fact that the company had been diverting funds to its partner index fund, Alameda Research, and that it had not taken enough actions to avoid risks for investors.
The SEC says it is charging “Bankman-Fried with violating the anti-fraud provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934.”
SBF was arrested Monday night by authorities in the Bahamas in cooperation with the United States and is expected to be extradited. He was also expected to appear before Congress Tuesday morning to testify but will no longer do so post-arrest, according to Rep. Maxine Waters.