The arrest of Sam Bankman-Fried in the Bahamas preempted what was scheduled to be his testimony before the House financial services committee.

We likely learned more about Bankman-Fried and FTX from the Securities and Exchange Commission complaint filed against him than we would have from his testimony. In his numerous interviews since the collapse of FTX, Bankman-Fried has stayed frustratingly vague about the operations of the exchange and insisted that while he “f—ed up,” he is basically a good guy down on his luck.

The SEC complaint paints a very different picture. It alleges that Bankman-Fried’s “crypto empire” was fraudulent from the start. It describes a “massive, years-long fraud” that included diverting billions of customers’ funds for his own personal benefit.

“Customers around the world believed his lies, and sent billions of dollars to FTX, believing their assets were secure on the FTX trading platform. But from the start, Bankman-Fried improperly diverted customer assets to his privately-held crypto hedge fund, Alameda Research LLC (“Alameda”), and then used those customer funds to make undisclosed venture investments, lavish real estate purchases, and large political donations,” the SEC explains.

The criminal complaint against Bankman-Fried alleges that he was taking customer funds as early as 2019.

Inflation Is Still a Problem

The Consumer Price Index (CPI) for November came in lower than expected at just one-tenth of one percent. Downside surprises on inflation have been all too rare over the past 18 months.

There were still troubling elements to the CPI report. For starters, food inflation continues to run extremely hot, rising half a percent in November and up 10.6 percent in the last 12 months. That is squeezing a lot of household budgets. It also is likely to raise inflation expectations because grocery prices are some of the most frequently purchased consumer goods.

The high price of putting food on the table was somewhat offset by a one percent decline in the index for household energy, the second straight monthly decline. Yet even with those declines, household energy bills are up 15.7 percent year-over-year. What’s more, energy prices may not continue to deflate now that China appears to be moving past its COVID lockdowns.