The Securities and Exchange Commission has charged the former chief executive of failed cryptocurrency firm FTX with orchestrating a scheme to defraud investors.

An SEC complaint filed Tuesday alleges that Sam Bankman-Fried raised more than $1.8 billion from equity investors since May 2019 by promoting FTX as a safe, responsible platform for trading crypto assets.

The civil complaint says Mr. Bankman-Fried diverted customer funds to Alameda Research LLC, his privately-held crypto fund, without telling them. 

The complaint also says Mr. Bankman-Fried commingled FTX customers’ funds at Alameda to make undisclosed venture investments, lavish real estate purchases, and large political donations.

“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 the SEC chairman, Gary Gensler. 

“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.”

Mr. Bankman-Fried was arrested Monday in the Bahamas at the request of the United States government, American and Bahamian authorities said.

The arrest was made after America filed criminal charges that are expected to be unsealed Tuesday, according to U.S. Attorney Damian Williams. 

Mr. Bankman-Fried had been under criminal investigation by American and Bahamian authorities following the collapse last month of FTX, which filed for bankruptcy on November 11, when it ran out of money after the cryptocurrency equivalent of a bank run.

The SEC charges are separate from the criminal charges expected to be unsealed later Tuesday.

A spokesman for Mr. Bankman-Fried had no comment Monday evening. Mr. Bankman-Fried has a right to contest his extradition, which could delay but not likely stop his transfer to America.