• The SEC accused Sam Bankman-Fried of orchestrating a "massive, years-long fraud" in which he diverted billions of dollars of FTX customer funds for "his own personal benefit."
• The civil complaint, filed in the Southern District of New York, said Bankman-Fried raised more than $1.8 billion from investors who bought an equity stake in the exchange, believing FTX had appropriate controls and risk management measures.
• The filing adds that customers "believed his lies," thought the platform was secure and sent billions of dollars to FTX.

Sam Bankman-Fried ran nothing less than a "brazen," yearslong fraud at his now-bankrupt crypto exchange FTX "from the start," which allowed him to divert billions of dollars of customer funds into his own hands to grow his sprawling empire, the U.S. Securities and Exchange Commission alleged in charges unveiled Tuesday.

Follow CNBC's live blog covering Tuesday's hearing on the collapse of cryptocurrency exchange FTX before the House Financial Services Committee.

The civil complaint, which the agency filed in the Southern District of New York, said Bankman-Fried raised more than $1.8 billion from investors who bought an equity stake in the exchange believing that FTX had appropriate controls and automatic risk management. The filing also alleges that customers "believed his lies" and believed the platform was secure — and subsequently sent billions of dollars to FTX.

The complaint in Manhattan federal court was filed a day after Bankman-Fried was arrested in the Bahamas by authorities who were notified that a criminal indictment had been filed against the 30-year-old in the same New York courthouse. He is due to appear in court in the Bahamas on Tuesday.

But from the start, the SEC claims, Bankman-Fried improperly diverted customer assets to his privately held crypto hedge fund, Alameda Research. He then allegedly used those customer funds to "make undisclosed venture investments, lavish real estate purchases, and large political donations."

"While he spent lavishly on office space and condominiums in The Bahamas, and sank billions of dollars of customer funds into speculative venture investments, Bankman-Fried's house of cards began to crumble," the filing said.

The SEC said Bankman-Fried hid those actions from FTX's equity investors, including American investors, "from whom he sought to raise billions of dollars in additional funds."

"He repeatedly cast FTX as an innovative and conservative trailblazer in the crypto markets," the complaint said.

"He told investors and prospective investors that FTX had top-notch, sophisticated automated risk measures in place to protect customer assets, that those assets were safe and secure, and that Alameda was just another platform customer with no special privileges."

"These statements were false and misleading," the complaint said.

American regulators have been roundly lambasted by lawmakers for their inability to get ahead of FTX's collapse, which on first blush makes SEC Chairman Gary Gensler's rapid revelation of charges appear reactive. But lawmakers have stymied Gensler's efforts to regulate FTX and the broader industry for months.

.@GaryGensler must testify before Congress and answer questions about the cost of his regulatory failures.

— Tom Emmer (@RepTomEmmer) December 9, 2022

One of the loudest voices speaking out against Gensler has been Rep. Tom Emmer, R-Minn. Emmer was a signatory to a March 16 letter that questioned the SEC's authority to look into "cryptocurrency and blockchain firms." Emmer has been one of the loudest pro-crypto voices in Congress and has benefited from FTX-connected support, netting $8,700 in campaign donations from Bankman-Fried's co-CEO, Ryan Salame.

Emmer claimed in a tweet Friday that Gensler did too little to regulate crypto markets, despite questioning Gensler's authority to do so months earlier.

Neither the SEC nor Emmer were immediately available to provide further comment.