FTX was a 'house of cards' built on a 'foundation of deception,' SEC boss says in scathing statement about Sam Bankman-Fried

• The SEC has accused FTX of being a "house of cards" built on a "foundation of deception," in a statement.
• The SEC released charges on Tuesday morning, accusing Bankman-Fried of a "years-long" fraud.

The US Securities and Exchange Commission has accused the crypto exchange platform, FTX, of being a "house of cards" built on a "foundation of deception," in a Tuesday statement.

In its complaint, the SEC announced it had charged the FTX cofounder, Sam Bankman-Fried, with "orchestrating a scheme to defraud" FTX investors.

Bankman-Fried was arrested on Monday in the Bahamas after FTX and its affiliates imploded in mid-November. US authorities confirmed the arrest on social media and the SEC released charges on Tuesday morning, accusing Bankman-Fried of a "years-long" fraud.

SEC Chair Gary Gensler said in the statement: "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."

The implosion of FTX has sent ripples across the largely unregulated cryptocurrency market.

Gensler said the alleged fraud committed by FTX served as a "clarion call to crypto platforms that they need to come into compliance with our laws."

The director of the SEC's Division of Enforcement, Gurbir S. Grewal, accused FTX of operating "behind a veneer of legitimacy" that was created by Bankman-Fried, per the Tuesday press release.

Grewal claimed that Bankman-Fried had touted best-in-class controls and adherence to specific investor protection principles to create a veneer that "wasn't just thin" but "fraudulent."

Representatives for FTX did not immediately respond to Insider's request for comment. Bankman-Fried could not be reached directly for comment.