FTX faces investigation by DoJ and US SEC

Sam Bankman-fried, Alameda Research, FTX.com and FTX US are all under regulatory scrutiny by authorities.

Sam Bankman-Fried, entrepreneur and CEO of cryptocurrency exchange FTX, is reportedly being investigated by the Department of Justice (DoJ) and the US Securities and Exchange Commission (SEC) regarding criminal activity and securities offences.

The FTX CEO is currently under investigation concerning the possibility he may have used custodial assets to fund bets at his hedge fund Alameda Research.

After acquiring several bankrupt firms and offering help to the ones in financial trouble, Bankman-Fried, previously dubbed as the “saviour of crypto” has faced several problems over the past week with the looming demise of FTX.

The company’s downfall has caused the price of major cryptocurrencies Bitcoin (BTC) and Ethereum (ETH) to drop by at least 13%.

After recently signing a Letter of Intent (LOI) agreeing to buy out FTX in principle. Binance quickly dropped its plans to acquire the exchange with concerns surrounding “mishandled customer funds and alleged US agency investigations”.

Now, both the SEC and DoJ are examining the collapsing crypto exchange to decipher if criminal activity and securities offences were committed.

As a result of his crumbling empire, Bankman-Fried’s net worth has reportedly plummeted from $16bn to zero.

In a thread of tweets, he stated he did not have enough liquidity to cover withdrawals.

“Right now, we're spending the week doing everything we can to raise liquidity. I can't make any promises about that. But I'm going to try. And give anything I have to if that will make it work.”

“I'm sorry. That's the biggest thing”, he wrote.

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Written by Isabella Aslam


Isabella is an experienced writer in B2B and B2C journalism. Alongside crypto, Isabella writes and discusses the topics of relationships and psychology. Isabella holds a first-class degree in music journalism and often interviews electronic artists and DJs.

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