A flurry of criminal and civil fraud charges laid against FTX founder Sam Bankman-Fried have pulled back the veil on the cryptocurrency exchange’s complete lack of internal controls and toothless risk management procedures.

Bankman-Fried was arrested Monday in the Bahamas, just as he was preparing to testify before the House Committee on Financial Services about why FTX, once valued at $32 billion, collapsed and filed for bankruptcy in November.

The Department of Justice (DOJ) unveiled an eight-count indictment Tuesday from a federal grand jury for the U.S. District Court for the Southern District of New York against Bankman-Fried. The FTX founder is charged with conspiracy to commit wire fraud, wire fraud, conspiracy to commit commodities fraud, conspiracy to commit securities fraud, conspiracy to commit money laundering, and conspiracy to defraud the Federal Election Commission and commit campaign finance violations. Five of the charges each carry a maximum sentence of 20 years in prison; three others carry a maximum sentence of five years each.

The DOJ did not release the full indictment, keeping everything but the charges under seal.

The Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CF TC) also filed civil complaints against Bankman-Fried alleging fraud. The CFTC also listed FTX Trading and Alameda Research as defendants in its complaint.

“As today’s charges make clear, this was not a case of mismanagement or poor oversight but of intentional fraud, plain and simple,” said U.S. Attorney Damian Williams in a press release.

Leaders at the SEC and CFTC have long argued digital assets should adhere to the same investor protection and corporate governance requirements as traditional investments. Others deride this approach as “regulation by enforcement” and argue a completely new regulatory framework is necessary to oversee cryptocurrencies.

The DOJ and regulators alleged that, since 2019, Bankman-Fried misappropriated billions of dollars in customer funds for his personal use, to make political contributions, and to repay loans for Alameda Research, a hedge fund he controlled.

Bankman-Fried and FTX claimed to investors the cryptocurrency exchange was a safe and responsible place for people to store, buy, and trade cryptocurrencies. They told investors FTX did not comingle customer funds with other entities. And FTX claimed to apply a proprietary “risk engine” to block any trades from accounts that did not have sufficient funds to support the transaction.

In reality, however, FTX customer funds were regularly moved to other entities controlled by Bankman-Fried, like Alameda Research and several associated entities, regulators alleged. Those activities were not disclosed to investors.

“FTX operated behind a veneer of legitimacy Mr. Bankman-Fried created by, among other things, touting its best-in-class controls, including a proprietary ‘risk engine,’ and FTX’s adherence to specific investor protection principles and detailed terms of service. But as we allege in our complaint, that veneer wasn’t just thin, it was fraudulent,” Gurbir Grewal, director of the SEC’s Division of Enforcement, said in a press release.

FTX customer funds were used by Bankman-Fried and Alameda to make risky bets in cryptocurrency, including the purchase of failing firms like BlockFi; to buy expensive real estate for Bankman-Fried and other FTX executives; to repay loans made by Alameda; and to make political contributions. Bankman-Fried and FTX executives took out several large loans from Alameda with FTX customer funds, the regulators said.

The risk management rules that applied to all other FTX customers did not apply to Alameda, regulators said, as Alameda was regularly allowed to trade cryptocurrencies on borrowed funds from FTX without sufficient funds in its account. Alameda also had what amounted to “unlimited credit” using FTX customer funds as collateral, they said.

Bankman-Fried and other FTX executives then took advantage of lax internal controls to cover their tracks and obscure the movement of funds between FTX and Alameda Research, regulators said.

“Digital commodity asset markets continue to present risks for investors due to the lack of basic protections,” said CFTC Chairman Rostin Behnam in a press release.

Speaking in place of Bankman-Fried before the House Committee on Financial Services on Tuesday, John Ray, FTX’s new chief executive charged with overseeing its bankruptcy, described the company as “old-fashioned embezzlement.”

“I don’t trust a single piece of paper in this organization,” he said during the hearing.