CFTC-Files Lawsuit against FTX Founders for Fraud

12/13/2022

1 minute read

2022.12.13 10:19

Budrigannews.com – The Commodity Futures Trading Commission, or CFTC, has filed a lawsuit against Alameda Research, FTX, and Sam Bankman-Fried, claiming that they have broken the Commodity Exchange Act and requesting a trial with a jury.

The CFTC filed a complaint against Bankman-Fried, FTX Trading, and Alameda Research for injunctive and other equitable relief as well as civil monetary penalties, according to court records filed on December 13 in the Southern District of New York. According to the complaint, SBF personally instructed FTC executives to implement features that would enable Alameda to use the cryptocurrency exchange as a credit line for its lenders.

The CFTC stated, “Contrary to [Bankman-Fried’s] representations, Alameda and FTX cameled funds and freely used FTX customer funds as if they were their own, including as capital to deploy in their own trading and investment activities, without disclosure to FTX customers.” FTX customer funds were used by Bankman-Fried, his parents, and other FTX and Alameda employees for a variety of personal expenses, including luxury real estate purchases, private jets, documented and undocumented personal loans, and personal political donations, according to information and belief.

More Bahamas and FTX worked together with new cryptocurrency

Following the filing of criminal charges in the United States, authorities in the Bahamas arrested Bankman-Fried on December 12. The two nations have an extradition agreement. On December 13, the Securities and Exchange Commission of the United States also brought charges against SBF, claiming that the company had broken the Securities Exchange Act of 1934 and the Securities Act of 1933.

Bankman-Fried was scheduled to testify on the collapse of FTX before the House Financial Services Committee on December 13 prior to his arrest. The former CEO’s written testimony, which was leaked, largely blamed others for the exchange’s demise.