FTX Founder Arrested on Fraud Charges
2022-12-14
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1The United States has charged the founder of cryptocurrency exchange FTX with several financial crimes.
2Sam Bankman-Fried was arrested Monday in the Bahamas.
3He had resigned as FTX chief last month, shortly after the company declared bankruptcy, or financial failure.
4U.S. government lawyers named eight criminal charges against the 30-year-old businessman.
5They include wire fraud, money laundering and conspiring to defraud.
6He was also charged with making illegal campaign donations.
7Bankman-Fried was one of the largest political donors this year.
8Separately, the U.S. Securities and Exchange Commission has brought civil charges against Bankman-Fried.
9The SEC is the top government supervisor of the American stock market.
10It says Bankman-Fried defrauded investors and illegally used their money to buy homes for himself and his family.
11A lawyer for Bankman-Fried said Tuesday that he is examining the charges with his legal team and considering what to do.
12At one point, the FTX founder was thought to be one of the world's richest people.
13He launched the business in 2019.
14Forbes magazine estimated his wealth at more than $26.5 billion as the company quickly grew.
15FTX 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.
16FTX customers flooded the company with demands to withdraw their money, but FTX could not honor the requests.
17It had used the money to support Alameda Research.
18Gary Gensler is the head of the SEC. He said Bankman-Fried lied to investors.
19"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."
20A "house of cards" means a building of very weak structure.
21The commission said Bankman-Fried then used the Alameda Research money to make high-risk investments, purchase homes and make donations to political campaigns.
22And, the SEC reports, Alameda Research did not keep track of the money coming from FTX.
23Bankman-Fried's arrest came just one day before he was to appear before the U.S. Congress to answer questions about FTX.
24Maxine Waters is a representative from California and the leader of the House Financial Services Committee.
25She 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 savings of so many."
26In recent interviews, Bankman-Fried said he did not "knowingly" misuse the money from his customers and he thinks people will eventually get their money back.
27The SEC's team said it does not think those statements are true.
28I'm Caty Weaver
1The United States has charged the founder of cryptocurrency exchange FTX with several financial crimes. 2Sam Bankman-Fried was arrested Monday in the Bahamas. He had resigned as FTX chief last month, shortly after the company declared bankruptcy, or financial failure. 3U.S. government lawyers named eight criminal charges against the 30-year-old businessman. They include wire fraud, money laundering and conspiring to defraud. He was also charged with making illegal campaign donations. 4Bankman-Fried was one of the largest political donors this year. 5Separately, the U.S. Securities and Exchange Commission has brought civil charges against Bankman-Fried. 6The SEC is the top government supervisor of the American stock market. It says Bankman-Fried defrauded investors and illegally used their money to buy homes for himself and his family. 7A lawyer for Bankman-Fried said Tuesday that he is examining the charges with his legal team and considering what to do. 8At 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. 9FTX 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. 10FTX 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. 11Gary Gensler is the head of the SEC. He said Bankman-Fried lied to investors. 12"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." A "house of cards" means a building of very weak structure. 13The commission said Bankman-Fried then used the Alameda Research money to make high-risk investments, purchase homes and make donations to political campaigns. 14And, the SEC reports, Alameda Research did not keep track of the money coming from FTX. 15Bankman-Fried's arrest came just one day before he was to appear before the U.S. Congress to answer questions about FTX. 16Maxine 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 savings of so many." 17In recent interviews, Bankman-Fried said he did not "knowingly" misuse the money from his customers and he thinks people will eventually get their money back. 18The SEC's team said it does not think those statements are true. 19I'm Caty Weaver 20Dan Friedell adapted this story for VOA Learning English based on a report by the Associated Press. 21___________________________________________________________ 22Words in This Story 23cryptocurrency -n. an alternative form of money that does not use banks insured by governments, instead it is kept track of only on computers 24wire fraud -n. the crime of stealing money electronically 25money laundering -n. receiving money through a criminal or corrupt act and then making it look like it came legally 26foundation -n. the structure that supports something built on top of it 27deception -n. making people think one thing but something else is the truth 28wipe out-v. to remove what was there before, wash away 29____________________________________________________________ 30We want to hear from you. Do you think any of the investors will get their money back? 31We have a new comment system. Here is how it works: 32Each time you return to comment on the Learning English site, you can use your account and see your comments and replies to them. Our comment policy is here.