The Manhattan U.S. attorney’s office is investigating FTX, Reuters and WSJ reported Monday. Prosecutors may focus initially on examining reports that FTX lent customer funds to Alameda Research. Police and regulators in the Bahamas have interview SBF, Bloomberg reported. Loading Something is loading.
Thanks for signing up!
Access your favorite topics in a personalized feed while you’re on the go.
The Manhattan U.S. attorney’s office is investigating FTX, according to news reports Monday, following the failure of the cryptocurrency exchange that was once valued at more than $32 billion.
Prosecutors at the Department of Justice’s Southern District of New York have opened a probe, Reuters reported, citing an unnamed source. Reuters last week reported, citing sources, that at least $1 billion of customer funds had vanished from Bahamas-based FTX.
The Wall Street Journal also reported that prosecutors in the Manhattan U.S. attorney’s office have opened an investigation into the once third-largest crypto exchange.
The WSJ report said prosecutors may focus, at least initially, on examining reports that FTX lent customer funds to Alameda Research to fund risky venture investments made by the quantitative trading firm. Both Alameda and FTX were founded and run by 30-year-old Sam Bankman-Fried.
A probe in Manhattan would widen the legal scrutiny facing FTX and Bankman-Fried. The Securities and the Commodity Futures Trading Commission had for months been investigating FTX.com in how it handled client funds, Bloomberg reported last week. SEC Chair Gary Gensler last week declined to offer formal confirmation of the investigation.
FTX and its affiliates last week filed for Chapter 11 bankruptcy protection and Bankman-Fried stepped down as CEO after the crypto exchange failed to secure a bailout as it faces a liquidity crunch.
Sam Bankman-Fried on Saturday was interviewed by Bahamian police and regulators, Bloomberg reported, according to a person familiar with the matter. Law-enforcement inquiries in the Bahamas don’t necessarily mean someone will be arrested or charged with a crime, the report said.