The United States Securities and Exchange Commission (SEC) announced charges against Sam Bankman-Fried (SBF) for allegedly defrauding investors on his embattled cryptocurrency exchange platform FTX.

Recall that last month, the securities watchdog launched an investigation into SBF to determine whether he violated securities laws. The SEC has now charged the former CEO with violating the anti-fraud provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934.

SEC Accuses SBF of Fraud

The SEC alleges that SBF orchestrated a “years-long” scheme to defraud equity investors in FTX Trading Ltd. (FTX). According to the commission, SBF concealed an undisclosed diversion of FTX customers’ funds to his trading company Alameda Research, raising more than $1.8 billion from investors, including $1.1 billion from 90 U.S.-based investors.

The Commission further alleges that the disgraced founder used commingled FTX customers’ funds at Alameda to “make undisclosed venture investments, lavish real estate purchases, and large political donations.”

“We allege that SBF built a house of cards on a foundation of deception while telling investors that it was one of the safest buildings in crypto. The alleged fraud committed by Mr. Bankman-Fried is a clarion call to crypto platforms that they need to come into compliance with our laws,” SEC Chair Gary Gensler said.

Investigation Still Ongoing

The securities watchdog stated that investigations into other securities law violations and other firms and individuals connected to the alleged scheme are ongoing.

The latest development comes just a day after the arrest of SBF by Bahamian authorities at the request of U.S. prosecutors. The U.S. is likely to request his extradition.

Meanwhile, different prospectors in the United States have filed more charges on SBF since FTX faced a liquidity crunch and filed for bankruptcy last month.

In a similar move, the U.S. Attorney’s Office for the Southern District of New York and the Commodity Futures Trading Commission (CFTC) have also recently filed separate charges against SBF, according to the SEC.

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