SEC boss calls FTX exchange a “house of cards”

The US SEC agency filed charges against Sam Bankman-Fried (SBF) over his biggest fraud with the use of FTX crypto exchange. 

Sam Bankman-Fried (SBF) is the founder & former CEO of FTX exchange. FTX exchange was the second biggest crypto exchange of this crypto sector until 8th November. Between 6 to 8 Nov majority of the crypto Investors started to withdraw funds from the FTX exchange, which further resulted in a liquidity crunch situation for the company. Finally on 12 Nov,  FTX company filed for bankruptcy under chapter 11 in a US district bankruptcy court. 

On 13 December, The United States Securities and Exchange Commission (SEC) filed several charges against SBF over his fraud with 50 million FTX users. 

Through the filed charges, the SEC agency claimed that SBF violated the securities law Act because he participated in the issuance, purchase, offer, or sale of any securities except for his account.

SEC charges against SBF are also linked with the illegal financial activities done by him, who transferred customers’ funds from FTX exchange to its affiliated companies like Alameda Research. 

Gary Gensler, chairman of the SEC agency, said:

“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.”

It is worth noting that the United States recently filed a complaint against SBF in the Bahamas. The police force from the Bahamas arrested SBF to hand over him to the US government agencies for further fraud charges proceedings against him. 

SEC is not only a financial market regulatory body that filed charges against SBF. Recently the US CFTC agency also filed a lawsuit against SBF over the fraud that he did with his FTX customers for his personal luxurious life & benefits for his close friends & relatives.

Read also: CFTC files Lawsuit against FTX former CEO SBF