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CFTC drags SBF to court for fraud

TL;DR

  • CFTC sues SBF in fraud claims
  • The agency claims investor’s funds were used for personal expenses
  • SBF appearance at Financial House cut short

The Commodities Futures Trading Commission has slammed a lawsuit on the CEO of the defunct exchange FTX. According to the filing, the exchange, alongside Alameda Research, a sister company, was listed as the defendant. CFTC claimed that both companies violated the commodity exchange act and, as such, must plead their case before a jury. The lawsuit was filed today in the Southern District of New York. The agency wants the court to mandate the defendant to offer relief to affected traders.

CFTC said that investor’s funds were used for personal expenses

CFTC urged the court to levy penalties against the company and its accomplices for their role in the issue. The agency claimed that SBF ordered high-ranking officials of the company to create a feature on the exchange platform which will allow Alameda to leverage the exchange as a line of credit for users.

The filing claimed that contrary to the claims made at FTX, the exchange and Alameda connived to use funds belonging to users as though it was theirs. Some of the funds were used as capital in their investments and trades. The CFTC also mentioned that SBF, his family, and some employees took out of the funds belonging to users for their expenses. Some expenditures include private jets, loans, and other personal fees.

SBF appearance at Financial House suspended

Authorities captured Sam Bankman Fried in the Bahamas on December 12 after he was slammed with criminal charges. He was extradited to the US because both countries agreed to extradition. Earlier, the SEC also dragged SBF to court over his violations of the anti-fraud laws of the SEC. The agency also said that the executive violated the securities act created in 1934.

Before he was arrested, SBF was billed to make an appearance at the committee of the Financial House today. However, a leaked testimony by the executive claimed that his employees were largely to be blamed for the mishap at the exchange. He mentioned that his fault in the issue was clicking a button in a DocuSign document which left the company in the hands of those that destroyed it.

Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decision.

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Owotunse Adebayo

Adebayo loves to keep tab of exciting projects in the blockchain space. He is a seasoned writer who has written tons of articles about cryptocurrencies and blockchain.

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