FTX Was Under US Investigation Months Before the Implosion
According to a recent report, US prosecutors have been conducting a probe into FTX’s operations long before it collapsed.
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- Reportedly, Damian Williams of the US Attorney’s Office for the Southern District of New York was working on an investigation of Sam Bankman-Fried crypto-empire several months before it collapsed.
- The probe was a part of a wider effort and had compliance with the Bank Secrecy Act as its main focus.
- At the time of writing, it is unknown how far the probe progressed and whether it uncovered anything before FTX filed for bankruptcy.
- FTX’s issues and irresponsible behavior became known after the company went to its main rival, Binance, for help to solve a severe illiquidity crunch.
- There are currently two bankruptcy filings for FTX, one chapter 11 filed in Delaware, and one chapter 15 filed in New York by the Bahaman liquidators.
- The ongoing investigation and liquidation of the affected companies keep uncovering more and more troubling information about how the companies were run.
- At one point FTX loaned Alameda Research $10 billion in users’ funds.
- Recent court documents indicate that the Bahaman government might have been behind a post-bankruptcy hack of FTX and that the chapter 15 bankruptcy filing might be an attempt to obstruct the proceedings in Delaware.
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Tim Fries
Tim Fries is the cofounder of The Tokenist. He has a B. Sc. in Mechanical Engineering from the University of Michigan, and an MBA from the University of Chicago Booth School of Business. Tim served as a Senior Associate on the investment team at RW Baird's US Private Equity division, and is also the co-founder of Protective Technologies Capital, an investment firm specializing in sensing, protection and control solutions.
