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FTX founder, Bankman-Fried, used clients’ funds to buy real estate, support politicians —SEC



The United States’ Securities and Exchange Commission (SEC) has charged Sam Bankman-Fried, the founder of Futures Exchange (FTX) for diverting customer funds, that resulted in loss of billions of dollars.

A SEC statement on Tuesday, obtained by Ripples Nigeria, revealed Bankman-Fried gave his hedge funds firm, Alameda Research Unlimited access to FTX customers’ funds and used the capital to make undisclosed venture investments, buy real estate properties, and make large political donations.

Ripples Nigeria had reported that Bankman-Fried, alongside two of his deputies, donated $69 million in US 2022 midterm election.

SBF, as he’s known widely in the cryptocurrency industry, accounted for $39.9 million of the political donations. In 2021, he was the second-largest individual donor for Joe Biden’s presidential campaign, handing out $5.2 million.

READ ALSO:FTX founder, Bankman-Fried reveals plan for refund of investors before arrest in US

Part of the SEC charges also accused Bankman-Fried of fraudulently raising $1.8 billion from investors since May 2019, out of which $1.1 billion was provided by 90 U.S.-based investors.

SEC stated Bankman-Fried violated the anti-fraud provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934.

According to SEC Chair, Gary Gensler, “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.”

Also, the Director of SEC’s Division of Enforcement, Gurbir Grewal, said, “FTX operated behind a veneer of legitimacy Mr. Bankman-Fried created by, among other things, touting its best-in-class controls, including a proprietary ‘risk engine,’ and FTX’s adherence to specific investor protection principles and detailed terms of service. But as we allege in our complaint, that veneer wasn’t just thin, it was fraudulent.”

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