Sam Bankman-Fried arrest updates: Former FTX CEO denied bail due to flight risk

Though cryptocurrency can seem a mystical world, the civil complaint from the Securities and Exchange Commission reads like a standard case of securities fraud, accusing Sam Bankman-Fried of building a "house of cards."

Bankman-Fried raised $1.8 billion for FTX while "orchestrating a massive, years-long fraud, diverting billions of dollars of the trading platform’s customer funds for his own personal benefit and to help grow his crypto empire," the complaint said.

Customers sent billions of dollars to FTX believing their assets were secure but, from the start, the SEC said Bankman-Fried "improperly diverted customer assets to his privately-held crypto hedge fund, Alameda Research LLC, and then used those customer funds to make undisclosed venture investments, lavish real estate purchases, and large political donations."

Federal prosecutors in New York said they would unseal related criminal charges later Tuesday.

"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.

The civil complaint seeks penalties and fines, but also to prohibit Bankman-Fried from "participating in the offer or sale of securities including crypto asset securities" in the future, a move that would complete his fall as the poster child for the emerging cryptocurrency marketplace.

While Sam Bankman-Fried was set to give testimony to a House committee Tuesday, later canceled after his arrest late Monday, he continues to reject requests from the Senate for a hearing of its own.

In a joint statement Monday afternoon, prior to his arrest, the top Democrat and Republican on the Senate Banking Committee called Bankman-Fried's refusal to appear "an unprecedented abdication of responsibility."

"Virtually every CEO, financial regulator, and administration official for Republicans and Democrats has agreed to testify in front of both the Senate and House when called upon -- that is how congressional oversight works," Sens. Sherrod Brown, D-Ohio, and Pat Toomey, R-Pa., said in a statement. "We have offered Sam Bankman-Fried two different dates for providing testimony before the Senate Banking, Housing, and Urban Affairs Committee, and are willing to accommodate virtual testimony. He has declined in an unprecedented abdication of accountability."

The committee will continue efforting an appearance from Bankman-Fried because he is "unwilling to accept service of a subpoena."

-ABC News' Allie Pecorin

Sam Bankman-Fried, the 30-year-old founder of FTX, quickly ascended to the top of the cryptocurrency sector, garnering goodwill in recent years as a philanthropist and leading proponent of industry regulation.

The cover of Fortune Magazine in August asked readers whether Bankman-Fried, known by some as "SBF," was "the next Warren Buffett."

After the sudden bankruptcy of FTX, however, he faced withering questions over the mismanagement of billions in customer funds.

Meanwhile, his net worth plummeted from $16 billion to $0 in less than a week, according to an estimate from Bloomberg.