The Securities and Exchange Commission (SEC) has charged former FTX CEO Sam Bankman-Fried with organizing a scheme to defraud investors after he was arrested in the Bahamas on Monday ahead of expected charges being filed. 

“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,” said SEC Chair Gary Gensler in a release. 

The SEC said in its complaint filed Tuesday that Bankman-Fried raised more than $1.8 billion from investors since May 2019 by promoting FTX as a “safe, responsible” cryptocurrency trading platform. 

But officials allege that he orchestrated a years-long fraud to conceal that the money was being diverted to a privately held cryptocurrency hedge fund called Alameda Research. Bankman-Fried also allegedly did not disclose to investors that Alameda Research was receiving special treatment on the FTX platform, including having an unlimited “line of credit,” and the increased risk coming from Alameda’s holdings in FTX. 

The complaint charges Bankman-Fried with violating the Securities Act of 1933 and the Securities Exchange Act of 1934. 

Bankman-Fried was arrested in the Bahamas, where he lives and where FTX was based until its collapse last month, after U.S. officials notified local authorities that criminal charges would be filed against him and the U.S. would “likely” request his extradition. 

The SEC complaint seeks a civil penalty and prohibition of Bankman-Fried from participating in the issuance, purchase, offer or sale of securities among other actions. But the U.S. attorney’s office for the Southern District of New York is unexpected to unseal criminal charges against Bankman-Fried also on Tuesday. 

“The alleged fraud committed by Mr. Bankman-Fried is a clarion call to crypto platforms that they need to come into compliance with our laws,” Gensler said. 

The House Financial Services Committee is set to hold a hearing on Tuesday on FTX. Bankman-Fried was supposed to testify but had signaled before his arrest that he did not intend to comply with a subpoena.