SBF, FTX, and Alameda Charged for Fraud by the SEC, CFTC, and the US District Attorney for the Southern District of New York

Per SEC

The SEC released a press release that they are officially charging Samuel Bankman-Fried (SBF), founder of FTX, with defrauding investors via the trading platform. The CFTC and the US District Attorney's Office for the Southern District of New York are also filing lawsuits against the founder.

"The complaint alleges that, in reality, Bankman-Fried orchestrated a years-long fraud to conceal from FTX’s investors"

Per the complaint, there was an "undisclosed diversion" of customer funds from FTX to Alameda, and the latter received special treatment, given an unlimited "line of credit" using customer funds. The complaint also said that the money of customers of the crypto platform was also used to make lavish real estate purchases and political donations.

Gary Gensler, the Chair of the SEC, stated SBF's actions and how he promised his customers safety in the crypto space. Gensler also highlighted how the situation shed light on trading platform conduct through disclosure and regulators.

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,"

SBF was charged with violating the Securities Act 1933 and Securities Exchange Act 1934 anti-fraud provisions. Aside from banning the FTX founder from selling, purchasing, offering, or issuing securities, there is also a demand that he loses his gains and faces a civil penalty.

SEC's Division of Enforcement Director, Gurbir S. Grewal, specifically detailed how SBF tried to appeal to the public with what was described as a "veneer of legitimacy," sharing how the platform promised to adhere to its terms of service in terms of investor protection principles.

Grewal: "We are holding Mr. Bankman-Fried responsible for fraudulently raising billions of dollars from investors in FTX and misusing funds belonging to FTX’s trading customers."

In a recent Twitter Spaces interview with us, when asked whether he would be testifying in front of Congress in person, SBF said that he won't and would only be calling in.

Resources:

SEC

Unusual Whales Interview

See flow at unusualwhales.com/flow.

tastytrade logo+
Get the best broker for options trading and earn Unusual Whales discounted! in cash with an eligible account deposit at tastytrade. Get an Unusual Whales bonus when you deposit $2000. Offer expires 3/31/25. Certain restrictions, terms and conditions apply.
Unusual Whales does not confirm the information's truthfulness or accuracy of the associated references, data, and cannot verify any of the information. Any content on this site or related pages are not intended to provide legal, tax, investment or insurance advice. Unusual Whales Inc. is not registered as a securities broker-dealer or an investment adviser with the U.S. Securities and Exchange Commission, the Financial Industry Regulatory Authority (“FINRA”) or any state securities regulatory authority. Nothing on Unusual Whales should be construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any security by Unusual Whales or any third party. Options, investing, trading is risky, and losses are more expected than profits. Please do own research before investing. Please only subscribe after reading our full terms and understanding options and the market, and the inherent risks of trading. It is highly recommended not to trade on this, or any, information from Unusual Whales. Markets are risky, and you will likely lose some or all of your capital. Please check our terms for full details.
Any content on this site or related pages are not intended to provide legal, tax, investment or insurance advice. Unusual Whales Inc. is not registered as a securities broker-dealer or an investment adviser with the U.S. Securities and Exchange Commission, the Financial Industry Regulatory Authority (“FINRA”) or any state securities regulatory authority. Nothing on Unusual Whales should be construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any security by Unusual Whales or any third party. Certain investment planning tools available on Unusual Whales may provide general investment education based on your input. You are solely responsible for determining whether any investment, investment strategy, security or related transaction is appropriate for you based on your personal investment objectives, financial circumstances and risk tolerance. You should consult your legal or tax professional regarding your specific situation. See terms for more information.