CFTC Sues Sam Bankman-Fried, FTX, And Alameda For Fraud

The Commodity Futures Trading Commission (CFTC) of the United States has filed a complaint against Sam Bankman-Fried, FTX, and Alameda Research, alleging breaches of the Commodity Exchange Act and requesting a jury trial.

The CFTC filed a complaint in the Southern District of New York on December 13 seeking injunctive and other equitable relief, as well as civil monetary penalties, against Bankman-Fried, FTX Trading, and Alameda Research.

According to the complaint, SBF directly told CFTC officials to put up features that would enable Alameda to utilize the crypto exchange as a line of credit for its lenders.

“Contrary to representations and without disclosure to FTX customers, Alameda and FTX comingled 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.”

The CFTC stated in its lawsuit that Bankman-Fried made false assertions regarding the health of his enterprises and the usage of client cash, which had a significant price impact on commodities like Bitcoin (BTC) and Ether (ETH).

The document reiterates SEC charges that Bankman-Fried improperly combined client assets and blurred the boundary between Alameda and FTX, with money spent on private planes and furtively used to fund a Super Bowl ad and sports stadium sponsorship.

CFTC Chairman Rostin Behnam said:

“Digital commodity asset markets continue to present risks for investors due to the lack of basic protections. CFTC continues to be fully committed to using all available enforcement tools and authorities to protect investors and root out those who seek to profit through fraud and misappropriation.”

The litigation comes after the Securities and Exchange Commission (SEC) of the United States charged Bankman-Fried with misleading FTX investors.

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