CFTC Files Lawsuits Against Bankman-Fried, FTX And Alameda: Report

Zinger Key Points
  • CFTC sues FTX, Bankman-Fried and Alameda for alleged violations of federal commodities laws.
  • Southern District of New York's U.S. Attorney's Office unseals indictment, Bankman-Fried accused of eight offenses.

Sam Bankman-Fried, FTX, and Alameda Research have been sued by the Commodity Futures Trading Commission (CFTC) for breaking federal commodities regulations. 

The top U.S. derivatives regulator alleges that Bankman-Fried and other FTX executives borrowed hundreds of millions of dollars from Alameda that they then used to fund political campaigns and buy real estate, according to a Tuesday Bloomberg report. 

The CFTC alleged in a complaint submitted on Tuesday in Manhattan federal court that “at Bankman-Fried’s direction, FTX executives created features in the underlying code for FTX that allowed Alameda to maintain an essentially unlimited line of credit on FTX.”

The only named defendant in the complaint is Bankman-Fried.

The CFTC complaint is expected to significantly worsen Bankman-Fried's serious legal issues.

He was charged on Tuesday by the Securities and Exchange Commission with running a multiyear plan to swindle investors.

He was detained on Monday in the Bahamas and is also charged criminally in the U.S.

Also read: No, Not The Luxury Villa! FTX's Bahamas Liquidators Want To Keep $200M Property

Federal Court Unseals Indictment: Bankman-Fried is facing a long list of accusations, including wire fraud, conspiracy to launder money, and violations of campaign finance laws, according to U.S. authorities.

Late on Monday, the Southern District of New York's U.S. Attorney's Office stated that it would move to unseal an indictment and request his extradition.

On Tuesday morning, a federal court unsealed the indictment.

Bankman-Fried is accused of eight offenses in total, including conspiracy to commit wire fraud on customers, conspiracy to commit wire fraud on lenders, conspiracy to commit commodities fraud, conspiracy to commit securities fraud, conspiracy to commit money laundering, and conspiracy to defraud the United States and break campaign finance laws.

The DOJ seeks that Bankman-Fried surrender any assets acquired as a result of these alleged offenses.

Bankman-Fried "agreed with others to defraud customers of by misappropriating those customers' deposits and using those deposits to pay expenses and debts of Alameda Research, Bankman-Fried's proprietary crypto hedge fund, and to make investments," according to the DOJ indictment.

Photo via Shutterstock. 

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Posted In: CryptocurrencyGovernmentNewsRegulationsLegalTop StoriesMarketsMediaAlameda ResearchCommodity Futures Trading CommissionFTXSam Bankman-FriedU.S. Department of Justice
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