Photonews Logo Photonews logo
  • Home
  • Pakistan
    • Punjab
    • Sindh
    • Khyber Pakhtunkhwa
    • Azad Jammu Kashmir
    • Balochistan
    • Gilgit – Baltistan
  • World
  • Business
  • Entertainment
  • Videos
    Gen V Season 2 trailer
    Videos

    Gen V Season 2 Trailer Cast, Plot, Premiere Details

    July 26, 2025 3 Min Read
    IShowSpeed Daniel La Belle race
    Videos

    IShowSpeed Beats Daniel La Belle in 40-Meter Race, Hits 41M Subscribers

    June 24, 2025 2 Min Read
    Cardi B new single Outside
    Videos

    Cardi B’s ‘Outside’ Single Sparks Buzz Over Offset and Stefon Diggs

    June 20, 2025 2 Min Read
  • Sports
  • Technology
  • Offbeat
  • Blog
  • Contact
Reading: FTX founder charged with fraud in crypto exchange’s collapse
PhotoNews Pakistan PhotoNews Pakistan
Font ResizerAa
Search
  • Home
  • Pakistan
    • Punjab
    • Sindh
    • Khyber Pakhtunkhwa
    • Balochistan
    • Azad Jammu Kashmir
    • Gilgit – Baltistan
  • World
  • Business
  • Entertainment
  • Videos
  • Sports
  • Technology
  • Offbeat
  • Blog
  • Contact
Have an existing account? Sign In
Follow US
© 2022 Photonews. All Rights Reserved.
CEO of FTX, Sam Bankman Fried
PhotoNews Pakistan > World > FTX founder charged with fraud in crypto exchange’s collapse
World

FTX founder charged with fraud in crypto exchange’s collapse

Web Desk
By Web Desk Published December 13, 2022 6 Min Read
Share
SHARE

US federal prosecutors on Tuesday alleged Sam Bankman-Fried committed fraud and violated campaign finance laws, and the founder and former CEO of FTX also faced additional charges by US regulators.

The 30-year-old Bankman-Fried arrived at a heavily guarded Bahamas court on Tuesday for his first in-person public appearance since the cryptocurrency exchange’s collapse. He could be extradited to the United States.

“Mr. Bankman-Fried is reviewing the charges with his legal team and considering all of his legal options,” his lawyer, Mark S. Cohen, said in a statement.

In the indictment, prosecutors said Bankman-Fried had engaged in a scheme to defraud FTX’s customers by misappropriating their deposits to pay for expenses and debts and to make investments on behalf of his crypto hedge fund, Alameda Research LLC.

He also defrauded lenders to Alameda by providing them with false and misleading information about the hedge fund’s condition, and sought to disguise the money he had earned from committing wire fraud, prosecutors said.

Both the US Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) alleged Bankman-Fried committed fraud in lawsuits filed on Tuesday.

“While he spent lavishly on office space and condominiums in The Bahamas, and sank billions of dollars of customer funds into speculative venture investments, Bankman-Fried’s house of cards began to crumble,” the SEC filing said.

The CFTC sued Bankman-Fried, Alameda, and FTX on Tuesday, alleging fraud involving digital commodity assets.

Since at least May 2019, FTX raised more than $1.8 billion from equity investors in a years-long “brazen, multi-year scheme” in which Bankman-Fried concealed that FTX was diverting customer funds to its affiliated crypto hedge fund, Alameda Research LLC, the SEC alleged.

While the public believed Bankman-Fried’s “lies” and sent billions of dollars to FTX, he improperly diverted customer funds to his hedge fund, the SEC said in a court filing. He continued to divert FTX customer funds even as it was increasingly clear that Alameda and FTX could not make customers whole, the SEC said.

Bankman-Fried has apologized to customers and acknowledged oversight failings at FTX, but said he doesn’t personally think he has any criminal liability.

Bankman-Fried founded FTX in 2019 and rode a cryptocurrency boom to build it into one of the world’s largest exchanges of the digital tokens. Forbes pegged his net worth a year ago at $26.5 billion, and he became a substantial donor to US political campaigns, media outlets and other causes.

A crypto exchange is a platform on which investors can trade digital tokens such as bitcoin.

Brad Simon, a criminal defense lawyer in New York, said he doubted Bankman-Fried would fight extradition, given his interviews about the case. Simon said he could be in the United States in a few weeks.

Simon also said US authorities likely moved to prevent Bankman-Fried from testifying in Congress, which could be used by his defense attorneys to claim certain immunities and it often “throws a monkey wrench in prosecutions.”

Crypto investors lost billions

FTX filed for bankruptcy on Nov. 11, leaving an estimated 1 million customers and other investors facing losses in the billions of dollars. The collapse reverberated across the crypto world and sent bitcoin and other digital assets plummeting.

A spokesperson for FTX Debtors declined to comment.

Known in financial circles by his initials, SBF, Bankman-Fried was a prominent and unconventional figure. He sported wild hair, t-shirts and shorts on panel appearances with statesmen like former US President Bill Clinton and former British Prime Minister Tony Blair.

Bankman-Fried became one of the largest Democratic donors in the United States, contributing $5.2 million to President Joe Biden’s 2020 campaign.

Police in the Bahamas, where FTX was based, said he was arrested Monday evening at his luxury gated community called the Albany in the capital, Nassau. Damian Williams, the US Attorney for the Southern District of New York, said in a statement on Monday evening the arrest came at the request of the US government.

The Bahamas’ attorney general’s office said it expected him to be extradited to the United States. Bahamas Police said he was arrested due to “various Financial Offences against laws of the United States, which are also offences” in the Bahamas.

It was not immediately clear what would take place at the hearing or whether Bankman-Fried would decide to fight extradition, potentially setting up a high-stakes battle.

FTX’s liquidity crunch came after Bankman-Fried secretly used $10 billion in customer funds to support his proprietary trading firm, Alameda Research, Reuters has reported. At least $1 billion in customer funds had vanished, the people said.

Bankman-Fried resigned as FTX’s chief executive officer the same day as the bankruptcy filing.

Unlike other customers, Alameda was allowed to hold a negative account on FTX’s platform, the SEC said. Bankman-Fried directed code to be written that allowed this, the agency said. (Reuters)

TAGGED:Featured
Share This Article
Facebook Twitter Pinterest Whatsapp Whatsapp LinkedIn Email Copy Link Print
Leave a comment

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Advertisement

HBL Saving Made Easy
HBL Saving Made Easy

Recent Posts

Pakistan Stock Exchange 2025

PSX Closes Higher Despite Mixed Session as SBP Holds Policy Rate Steady

Kamchatka earthquake impact on Moscow

Why Russia’s Sixth Strongest Earthquake Didn’t Impact Moscow

Meta AI coding interviews 2025

Meta Introduces AI-Enabled Coding Tests to Job Interviews

Post Archives

More Popular from Photonews

State Bank of Pakistan policy rate 2025
Pakistan

State Bank of Pakistan Maintains Policy Rate at 11%

3 Min Read
Kamchatka earthquake
Top NewsWorld

8.8 Magnitude Earthquake Strikes Kamchatka Peninsula Trigger Tsunami Warnings

4 Min Read
Ozzy Osbourne Taylor Swift
Entertainment

Ozzy Osbourne’s Praise for Taylor Swift Resurfaces After His Death

2 Min Read
Sports

Khabib: Jack Della Maddalena Poses Bigger Threat to Islam Makhachev Than Ilia Topuria

Khabib Nurmagomedov has stated that UFC welterweight champion Kamaru Usman poses a tougher challenge for lightweight…

July 24, 2025
BusinessTop News

Donald Trump Announces 25% Tariff on Indian Imports Effective August 1

On Wednesday, former US President Donald Trump announced via his social media platform Truth Social that…

July 30, 2025
Khyber Pakhtunkhwa

Missing Tourist Family At Babusar Top Flash Floods

On July 27, 2025, local authorities identified a missing tourist family swept away by flash floods…

July 28, 2025
Pakistan

Adil Raja Defends Public Interest Claims in UK Defamation Trial Against Rashid Naseer

Former Pakistan Army Major (retired) Adil Raja testified via video link at the London High Court,…

July 24, 2025
PhotoNews Pakistan

Always Stay Up to Date

Subscribe to our newsletter to get our newest articles instantly!

Categories

  • World
  • Pakistan
  • Punjab
  • Sindh
  • Khyber Pakhtunkhwa
  • Balochistan
  • Azad Jammu Kashmir

 

  • Top News
  • Business
  • Entertainment
  • Sports
  • Videos
  • Tech
  • Offbeat
  • Blog

© 2024 Phototnews
All Rights Reserved.

Welcome Back!

Sign in to your account

Lost your password?