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Disgraced FTX founder Sam Bankman-Fried busted in Bahamas,
charged with defrauding investors out of $1.8B
By Emily Crane and Lee Brown
December 12, 2022 6:52pm Updated
Accused crypto crook Sam Bankman-Fried has been busted in the Bahamas — accused of “massive, years-long fraud” that defrauded investors out of $1.8 billion through “a house of cards” built “on a foundation of deception.”
The fallen 30-year-old FTX mogul was arrested Monday night after the Bahamian government received formal notification from the US of charges against him.
The US attorney for the Southern District of New York is expected to charge him Tuesday with wire fraud, wire fraud conspiracy, securities fraud, securities fraud conspiracy and money laundering.
As he awaited his first appearance before a magistrate in the Bahamas on Tuesday, he was separately charged by the US Securities and Exchange Commission (SEC).
“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,” SEC Chair Gary Gensler said while revealing the civil complaint.
“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.”
Disgraced former FTX co-founder Sam Bankman-Fried was arrested in the Bahamas on Monday.
Getty Images
The SEC complaint says that “Bankman-Fried raised more than $1.8 billion from investors” who believed “that FTX had appropriate controls and risk management measures.”
“Unbeknownst to those investors (and to FTX’s trading customers), Bankman-Fried was orchestrating a massive, years-long fraud, diverting billions of dollars of the trading platform’s customer funds for his own personal benefit and to help grow his crypto empire.”
Bankman-Fried “portrayed himself as a responsible leader of the crypto community” and “touted the importance of regulation and accountability,” the complaint says.
A house in the Bahamas linked to disgraced FTX co-founder Bankman-Fried. Albany Bahamas
It just seems odd to me that the house and yard of such a chronic liar would be built with so many straight lines. Curious.
“Customers around the world believed his lies, and sent billions of dollars to FTX, believing their assets were secure.”
Bankman-Fried also “placed billions of dollars of FTX customer funds into Alameda,” his privately held crypto fund, without telling them, the complaint alleges.
“He then used Alameda as his personal piggy bank to buy luxury condominiums, support political campaigns, and make private investments, among other uses,” the complaint reads.
“None of this was disclosed to FTX equity investors or to the platform’s trading customers.”
China arrests 63 in $1.7 billion crypto money laundering scheme
By Simon Druker
Police in northern China arrested 63 people over the weekend, accused of laundering nearly $1.7 billion worth of
Chinese Yuan using cryptocurrency. Photo courtesy of Public Security Bureau of Inner Mongolia Autonomous Region
Dec. 12 (UPI) -- Police in northern China arrested 63 people accused of laundering nearly $1.7 billion worth of Chinese yuan using cryptocurrency.
The Inner Mongolia Autonomous Region Public Security Bureau announced the arrests on Saturday, seizing around $4.5 million in Chinese currency in the process.
Those arrested have ties to a money laundering gang, which started operating in May 2021, according to police.
This comes amid a growing crackdown from Beijing on China's crypto market, which ranks fourth worldwide, despite an official ban on trading.
Police accused the gang of collecting illicit proceeds from online pyramid schemes, fraud and gambling among other sources. Those involved then converted the cash into Tether, a stablecoin on par with the U.S. dollar.
The money was eventually converted back into Chinese yuan, through several different cryptocurrencies.
Police say the participants used the messaging app Telegram, which is banned in China, to recruit international participants and help launder the money back into Chinese currency.
More than 200 police officers were involved in the operation in the northern region of the country. A pair of suspects were also traced to Bangkok, Thailand and extradited to China, according to police.
Investigators were first tipped off in July, after identifying a bank account with regular monthly deposits of around $1.4 million or 10 million yuan.
China has been trying to root out cryptocurrency from its financial markets for more than a year. In June 2021, Beijing publicized a multi-billion-dollar shutdown of the crypto trading industry.
Despite the official ban, the country still has a large underground community.
Chinese authorities arrested over 1,100 people in 2021 in relation to crypto-related money laundering.
In case you haven't figured it out yet, these two stories make it clear that you should only invest in crypto-currencies with money you can afford to lose.
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