Top Lessons Investors Should Take Away From The Collapse Of FTX
The U.S. attorney’s office for the Southern District of New York officially charged cryptocurrency exchange FTX’s founder Sam Bankman-Fried (SBF) with eight counts of fraud and conspiracy, calling the collapse of FTX “one of the biggest financial frauds in American history.” The U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission also sued SBF for fraud on the same day. These lawsuits came just the day after the Royal Bahamas Police Force arrested SBF.
Although the FTX case dealt with cryptocurrency, the crime SBF was alleged to have committed was no different than Bernie Madoff’s, which was stealing money from customers. Federal prosecutors accused him of “misappropriating FTX.com customers’ deposits … and violating campaign finance rules for conspiring with others to make illegal political contributions.” The SEC accused SBF of building “a house of cards on a foundation of deception while telling investors that it was one of the safest buildings in crypto” and using customers’ money (without their knowledge nor permission) to support his trading firm Alameda, and “undisclosed private venture investments, political contributions, and real estate purchases.” Read the rest here.