Mr. Bankman-Fried's attorney, Mark Cohen of Cohen & Gresser, didn't immediately respond to a request for comment outside normal business hours.
Mr. Bankman-Fried diverted billions of dollars of customer funds to help grow his other entities, according to the SEC's civil complaint filed Tuesday also in New York's Southern District court. Wall Street's main regulator alleged that FTX raised more than $1.8 billion, including $1.1 billion from about 90 U.S.-based investors, in an "orchestrated scheme to defraud equity investors" who bought in based on the belief that FTX had appropriate controls.
"We allege that Sam Bankman-Fried built a house of cards on a foundation of deception while telling investors that it was one of the safest buildings in crypto," SEC Chairman Gary Gensler said in a statement.
Mr. Bankman-Fried misled investors, telling them that FTX had sophisticated risk controls and that their assets were secure, according to the SEC. Instead he was using their money as a "virtually unlimited line of credit" for trading firm Alameda Research, which Mr. Bankman-Fried also founded. The SEC claimed that, from the start, Bankman-Fried diverted customer assets to Alameda to make undisclosed investments, political donations and lavish real estate buys. The SEC also alleged that Mr. Bankman-Fried concealed risks and obscured FTX's relationship with the trading firm.
The CFTC is bringing charges against SBF, FTX and Alameda for fraud of digital commodity assets, a person familiar said.More than 100 FTX-related entities, including Alameda, filed for U.S. bankruptcy protections on Nov. 11. The criminal and civil charges filed so far have focused entirely on Mr. Bankman-Fried, which raises questions about whether other former FTX and Alameda executives have been cooperating with prosecutors.