gretchen lowe from the cftc. good afternoon. acting director gretchen lowe, division of enforcement at the cftc, thank you for the opportunity to speak today. today the cftc filed a complaint against sam bankman-fried and his companies, ftx and alameda, charging a fraudulent scheme that dates back to the launch of ftx.com exchange in may of 2019. cftc complaint charges fraud, misappropriation of customer funds, as well as false statements to the public, customers, investors and congress about the handling and security of those funds. as alleged, over 8 billion in customer losses that we have ascertained as of today. the rippling consequences of defendant s fraud are vast and have done significant damage to the integrity of the market.
at his direction, customers, customer deposits intended to be used to trade digital asset xhod i future swaps and other products were not appropriately segregated by ftx. instead, held in alameda accounts where they were co-mingled and misappropriated, political contributions and luxury real estate. as charged, the fraudulent use by bankman-fried and companies were inconsistent with the touted ftx terms of service and contrary to public statements made by bankman-fried. sandra: we are going to continue to monitor the news conference out of new york city, sdny with an update on the
total, i ve been digging into this for weeks, talking to sources, pulling blockchain ledger records and pouring over information. just over a billion has been recovered by new management and a lot of value was lost in poor margin trading and the cryptoindustry in general over the past year, but also spent a bunch. ftx and alameda spent billion on venture investments, a few million here and there, meta theory, ukalabs, and spent heaps on sponsorship and celebrity endorsement deals, and planning to pay taylor swift $100 million. from the charges filed as well as court documents, the company insiders paid themselves over a billion in loans, bought hundreds of millions worth of real estate in the bahamas and used company profits to finance those political donations. a lot of that money can be clawed back in bankruptcy, not great news for politicians that
plug the multi-billion dollar holes he had created. his brazen multi-year scheme finally came to an end when ftx, alameda, and the tangled web of affiliates filed or bankruptcy on november 11, 2022. that collapse has had far-reaching consequences for ftx customers, investors and counter parties. and our investigation into those consequences and those individuals and entities involved remains ongoing. but one immediate take away from today s announcement should be noncompliant trading platforms pose dramatic risks to customers and investors. among other things, they don t provide them with the same robust level of disclosures and protections against fraud and conflicts of interest. that s what traditional u.s. registered security exchanges provide. it s imperative the noncompliant platforms come into compliance. as chair genzler has made clear,
bankman-fried raised more than $1.8 billion from equity investors on the basis of lies. you see, ftx operated behind a veneer of legitimacy that bankman-fried created by among other things, repeatedly touting to investors ftx topnotch automated risk controls that he claim protected customer assets and by repeatedly claiming that those assets were at all times safe, segregated and secure. but as we allege in our complaint, that veneer was not just thin, it was also fraudulent. because in reality, from ftx inception in 2019, bankman-fried began secretly and improperly diverting ftx customer funds to his cryptohedge fund, alameda research. and alleged in our complaint he then misused those funds to make undisclosed venture investments, lavish real estate purchases,