FTX Founder Arrested on Fraud Charges

FTX Founder¹ Arrested on Fraud Charges

The United States has charged the founder of cryptocurrency exchange FTX with several financial crimes.

Sam Bankman-Fried was arrested Monday in the Bahamas. He had resigned as FTX chief last month, shortly after the company declared bankruptcy², or financial failure.

U.S. government lawyers named eight criminal charges against the 30-year-old businessman. They include wire fraud, money laundering³ and conspiring⁴ to defraud⁵. He was also charged with making illegal campaign donations.

Bankman-Fried was one of the largest political donors⁶ this year.

Separately, the U.S. Securities and Exchange Commission has brought civil charges against Bankman-Fried.

The SEC is the top government supervisor⁷ of the American stock market. It says Bankman-Fried defrauded⁸ investors⁹ and illegally used their money to buy homes for himself and his family.

A lawyer for Bankman-Fried said Tuesday that he is examining the charges with his legal team and considering what to do.

At one point, the FTX founder was thought to be one of the world's richest people. He launched the business in 2019. Forbes magazine estimated his wealth at more than $26.5 billion as the company quickly grew.

FTX failed in November, when reports came out that the company and another of Bankman-Fried's, Alameda Research, did not have as much money as people thought.

FTX customers flooded the company with demands to withdraw their money, but FTX could not honor the requests. It had used the money to support Alameda Research.

Gary Gensler is the head of the SEC. He said Bankman-Fried lied to investors.

"Sam Bankman-Fried built a house of cards on a foundation of deception¹⁰ while telling investors that it was one of the safest buildings in crypto." A "house of cards" means a building of very weak structure.

The commission said Bankman-Fried then used the Alameda Research money to make high-risk investments, purchase homes and make donations to political campaigns.

And, the SEC reports, Alameda Research did not keep track of the money coming from FTX.

Bankman-Fried's arrest came just one day before he was to appear before the U.S. Congress to answer questions about FTX.

Maxine Waters is a representative from California and the leader of the House Financial Services Committee. She said she was disappointed Bankman-Fried would not speak because, in her words, "the American public deserves to hear directly ... about the actions that wiped out the hard-earned life savings¹¹ of so many."

In recent interviews, Bankman-Fried said he did not "knowingly" misuse¹² the money from his customers and he thinks people will eventually get their money back.

The SEC's team said it does not think those statements are true.

Words in This Story

cryptocurrency –n. an alternative form of money that does not use banks insured by governments, instead it is kept track of only on computers

wire fraud –n. the crime of stealing money electronically

money laundering –n. receiving money through a criminal or corrupt¹³ act and then making it look like it came legally

foundation –n. the structure that supports something built on top of it

deception –n. making people think one thing but something else is the truth

wipe out–v. to remove what was there before, wash away

1 Founder   

n.创始者，缔造者

参考例句：

• He was extolled as the founder of their Florentine school.他被称颂为佛罗伦萨画派的鼻祖。
• According to the old tradition,Romulus was the founder of Rome.按照古老的传说，罗穆卢斯是古罗马的建国者。

2 bankruptcy   

n.破产；无偿付能力

参考例句：

• You will have to pull in if you want to escape bankruptcy.如果你想避免破产，就必须节省开支。
• His firm is just on thin ice of bankruptcy.他的商号正面临破产的危险。

3 laundering   

n.洗涤（衣等），洗烫（衣等）；洗（钱）v.洗（衣服等），洗烫（衣服等）( launder的现在分词 )；洗（黑钱）（把非法收入改头换面，变为貌似合法的收入）

参考例句：

• Separate the white clothes from the dark clothes before laundering. 洗衣前应当把浅色衣服和深色衣服分开。 来自《简明英汉词典》
• He was charged with laundering money. 他被指控洗钱。 来自《简明英汉词典》

4 conspiring   

密谋( conspire的现在分词 )； 搞阴谋； （事件等）巧合； 共同导致

参考例句：

• They were accused of conspiring against the king. 他们被指控阴谋反对国王。
• John Brown and his associates were tried for conspiring to overthrow the slave states. 约翰·布朗和他的合伙者们由于密谋推翻实行奴隶制度的美国各州而被审讯。

5 defraud   

vt.欺骗，欺诈

参考例句：

• He passed himself off as the managing director to defraud the bank.他假冒总经理的名义诈骗银行。
• He is implicated in the scheme to defraud the government.他卷入了这起欺骗政府的阴谋。

6 donors   

n.捐赠者( donor的名词复数 )；献血者；捐血者；器官捐献者

参考例句：

• Please email us to be removed from our active list of blood donors. 假如你想把自己的名字从献血联系人名单中删去，请给我们发电子邮件。
• About half this amount comes from individual donors and bequests. 这笔钱大约有一半来自个人捐赠及遗赠。 来自《简明英汉词典》

7 supervisor   

n.监督人，管理人，检查员，督学，主管，导师

参考例句：

• Between you and me I think that new supervisor is a twit.我们私下说，我认为新来的主管人是一个傻瓜。
• He said I was too flighty to be a good supervisor.他说我太轻浮不能成为一名好的管理员。

8 defrauded   

v.诈取，骗取( defraud的过去式和过去分词 )

参考例句：

• He defrauded his employers of thousands of dollars. 他诈取了他的雇主一大笔钱。 来自《简明英汉词典》
• He defrauded them of their money. 他骗走了他们的钱。 来自辞典例句

9 investors   

n.投资者，出资者( investor的名词复数 )

参考例句：

• a con man who bilked investors out of millions of dollars 诈取投资者几百万元的骗子
• a cash bonanza for investors 投资者的赚钱机会

10 deception   

n.欺骗，欺诈；骗局，诡计

参考例句：

• He admitted conspiring to obtain property by deception.他承认曾与人合谋骗取财产。
• He was jailed for two years for fraud and deception.他因为诈骗和欺诈入狱服刑两年。

11 savings   

n.存款，储蓄

参考例句：

• I can't afford the vacation,for it would eat up my savings.我度不起假，那样会把我的积蓄用光的。
• By this time he had used up all his savings.到这时，他的存款已全部用完。

12 misuse   

n.误用，滥用；vt.误用，滥用

参考例句：

• It disturbs me profoundly that you so misuse your talents.你如此滥用自己的才能，使我深感不安。
• He was sacked for computer misuse.他因滥用计算机而被解雇了。

13 corrupt   

v.贿赂，收买；adj.腐败的，贪污的

参考例句：

• The newspaper alleged the mayor's corrupt practices.那家报纸断言市长有舞弊行为。
• This judge is corrupt.这个法官贪污。