A day after authorities arrested disgraced FTX founder Sam Bankman-Fried, prosecutors have a big warning for crypto platforms: Comply with the government, or risk legal action.
The criminal charges against Bankman-Fried were unveiled Tuesday morning by prosecutors in the Southern District of New York. The FTX founder and former CEO was hit with eight counts, including wire fraud, conspiracy to defraud the U.S., and money laundering. Bankman-Fried has also been accused of violating campaign finance laws by making illegal contributions under aliases, and the Justice Department has demanded he forfeit his assets.
Damian Williams, U.S. attorney from SDNY, reiterated the charges later on Tuesday in a press conference. Williams said that Bankman-Fried had “knowingly” defrauded customers and investors of FTX as well as lenders to Alameda Research, a crypto hedge fund he founded in 2017. Williams accused Bankman-Fried of secretly and illegally funneling customer funds from FTX to finance operations at Alameda.
“This is one of the biggest financial frauds in American history,” Williams said. He added that while only Bankman-Fried has been charged so far, “we are not done.”
Williams was joined by a host of U.S. officials in outlining the charges against Bankman-Fried, including Gurbir Grewal, director of the SEC Enforcement Division. The SEC brought a separate set of civil charges against Bankman-Fried on Tuesday, and Grewal warned other unregulated and rogue cryptocurrency trading platforms to register with the SEC soon, or risk falling afoul of federal prosecutors.
“One immediate takeaway from today’s announcement should be that noncompliant trading platforms pose dramatic risks to both their investors and to their customers,” he said. “It’s imperative that noncompliant platforms come into compliance.”
Federal regulators have been warning about the rise of noncompliant crypto platforms for months. In May, the SEC announced that Grewal’s division had brought forth more than 80 enforcement actions against “fraudulent and unregistered crypto asset offerings and platforms” since its creation in 2017. And FTX was far from the only crypto platform to implode and harm investors this year. Failures at crypto lender Voyager Digital and crypto hedge fund Three Arrows Capital were just some of the many meltdowns the sector witnessed.
Grewal warned noncompliant firms that time was running short for them to register with the SEC, echoing statements made last week by SEC Chair Gary Gensler, who in an interview with Yahoo Finance warned crypto companies that the “runway is getting shorter” and they must “come into compliance” with U.S. regulations soon or risk facing legal action.
On Tuesday, Grewal echoed Gensler’s earlier language.
“As Chair Gensler has made clear, the runway is getting shorter for them to come in to register with us. And for those who do not, the Enforcement Division stands ready to take action,” he said.
Grewal warned investors and customers to remain cautious on crypto platforms, which he said “don’t provide [customers] with the same robust level of disclosures and protections against fraud and conflicts of interest” as SEC-registered platforms do.”
As for Bankman-Fried, the disgraced former CEO was expected to make a virtual appearance at a House hearing on Tuesday to answer regulators’ questions on the FTX collapse and lost customer funds, but was arrested Monday evening by authorities in the Bahamas, where he resided, on the direction of the U.S. government.
U.S. authorities are likely to request his extradition soon, Bahamian officials said Monday. Williams said extradition talks were “ongoing” with the Bahamas.
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This story originally Appeared on Fortune