SEC Charges Samuel Bankman-Fried With Using FTX To Defraud Crypto Investors

Posted on January 24th, 2023 at 2:57 PM
SEC Charges Samuel Bankman-Fried With Using FTX To Defraud Crypto Investors

From the Desk of Jim Eccleston at Eccleston Law.

The Securities and Exchange Commission (SEC) has charged Samuel Bankman-Fried with operating a scheme to defraud equity investors in FTX Trading Ltd.

The SEC’s complaint alleges that FTX, which is based in the Bahamas, has raised at least $1.8 billion from equity investors, including $1.1 billion from 90 U.S.-based retail and institutional investors, since May 2019. Former CEO Bankman-Fried repeatedly touted FTX as a safe crypto asset trading platform while specifically promoting FTX’s automated risk measures that were purportedly utilized to protect investor assets.

However, the SEC accuses Bankman-Fried of operating a scheme to conceal the undisclosed diversion of FTX customers' funds to Alameda Research LLC as well as the undisclosed special treatment afforded to Alameda on the FTX platform, including providing Alameda with a virtually unlimited "line of credit" funded by the platform's customers and exempting Alameda from certain key FTX risk mitigation measures. The SEC further alleges that Bankman-Fried used commingled FTX funds at Alameda to pay for undisclosed venture investments, real estate purchases, and large political contributions.

Eccleston Law LLC represents investors and financial advisors nationwide in securities, employment, regulatory and disciplinary matters.

Tags: eccleston, eccleston law, advisors, law, sec

Return to Archive

TESTIMONIALS

Previous
Next

Thank You from the bottom of our hearts for all you have done for us. When we realized this was a very bad investment - we did not know where to turn for help. Then we received your name. When we called you - you were so kind to us and then agreed to help us. For this we are so very grateful. The world would be a much nicer place if there were more people like the two of you in it. We will always remember all the help and kindness you have shown us. Thank you so very very much for everything.

Wayne and Judy S.

LATEST NEWS AND ARTICLES

July 15, 2025
Former Advisor Sues Prime Capital Again Over Unpaid Equity Redemption

A former San Diego-based advisor has filed a second lawsuit against Prime Capital Financial, alleging breach of contract after the firm failed to honor agreed-upon terms related to his equity buyout.

July 14, 2025
Wisconsin Man Charged in $15.8 Million Ponzi Scheme Disguised as Investment Advisory Business

Federal authorities have charged a Wisconsin man with orchestrating a multimillion-dollar Ponzi scheme that defrauded more than 120 investors over six years.

July 11, 2025
FINRA Advances Proposal to Allow Limited Use of Performance Projections

The Financial Industry Regulatory Authority (“FINRA”) is moving forward with a proposal that would give broker-dealers limited ability to market performance projections and targeted returns under specific conditions.