Raising capital is the biggest challenge for most start-up hedge funds. Sam Bankman-Fried had an answer to that problem according to civil charges made public on Tuesday by US regulators. These allege that he knowingly siphoned as much as $8bn of account-holder funds for his crypto trading outfit, Alameda Research. Parallel criminal charges from the US Department of Justice include conspiracy to commit wire fraud.
Since the collapse of his crypto platform FTX, Bankman-Fried has maintained in a series of interviews that he was merely guilty of sloppy record-keeping. He added that he exercised little management control of Alameda.
The complaint from the US Securities and Exchange Commission paints a different picture: not of a mad scientist but of a calculating fraudster.