CFTC Plans to Sue Bankman-Fried, FTX and Alameda for Fraud: BBG

Binance, the world’s largest cryptocurrency exchange, said Tuesday it is pausing withdrawals of the stablecoin USDC while it carries out a “token swap.” The move comes as investor ...

Plaintiff Commodity Futures Trading Commission (“CFTC” or “Commission”), by and through its undersigned attorneys, hereby alleges as follows: SUMMARY 1. Samuel Bankman-Fried (“Bankman-Fried”) co-founded Alameda Research LLC (“Alameda”), a digital asset trading and investment firm, in Berkeley, California in 2017. In May 2019, he and others launched FTX Trading Ltd. b/d/a FTX.com (“FTX Trading”) and various subsidiaries, affiliates, and related entities, collectively doing business as “FTX.com” or simply “FTX,” a centralized digital a sset exchange. (These parties ar e collectively referred to as “Defendants”). Alameda and FTX were large andwell-known players in the digital asset industry, and Bankman-Fried was their young, high-profile leader. 2. At its peak, the daily trading volume on FTX.com was over $20 billion, and it had garnered a $32 billion valuation. FTX had pr ominent paid sponsorships, including the naming rights to a professional sports arena in Miami, celebrity endorsements, and a 2022 Super Bowl commercial that touted FTX as “the safest and easiest way to buy and sell crypto.” Case 1:22-cv-10503 Document 1 Filed 12/13/22 Page 1 of 40 tweet at 9:24am: Alameda’s borrowed funds could also be withdrawn from FTX. These features, in combination, allowed Alameda unlimited ability to borrow and withdraw digital assets directly from FTX Trading to put towards its off-platform activities. tweet at 9:25am: Alameda also enjoyed an additional execution time privilege as a result of not being subject to certain automated verification processes tweet at 9:28am: CFTC officially demands a jury trial for SBF https://t.co/bPCvgCO0VX