FTX came to the attention of US federal prosecutors months
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FTX came to the attention of US federal prosecutors months before the crash

It has emerged that crypto exchange FTX, which is now in bankruptcy proceedings, was under the surveillance of federal prosecutors from New York in the months leading up to the collapse. This was first reported by Bloomberg, citing sources familiar with the investigation.

    Image source: Mariia Shalabaieva/unsplash.com

Image source: Mariia Shalabaieva/unsplash.com

The US Attorney’s Office for the Southern District of New York has spent months extensively investigating cryptocurrency-related platforms with US and offshore operations, including FTX.

The collapse of FTX led to the spread of the crisis in the industry and affected the liquidity of companies associated with the structure, which until recently was one of the largest crypto exchanges – investigations began in several countries at once. Many have doubts about the future of the entire crypto industry after FTX announced a “serious liquidity crisis”.

Earlier this month, FTX filed for bankruptcy and founder Sam Bankman-Fried stepped down as CEO. Additionally, Binance’s competitors have actually gone out of business by abandoning the previously proposed acquisition.

Some crypto companies are already anticipating the consequences of the FTX collapse, with many believing in millions of dollars in losses from working with the exchange. Furthermore, the collapse of FTX appears to be leading to a “crackdown” across the crypto industry. It is known that Bank of England officials have already stated that the current situation shows the need to bring the crypto world under the regulatory framework. The central bank believes that while the crypto world is not yet sufficiently connected to the mainstream financial market to threaten the stability of the main financial system, these connections are rapidly evolving. The bank believes FTX’s troubles have made it clear that regulators need to tighten controls as soon as possible.

The former CEO of the crypto exchange himself said he has not given up on rescue attempts for the company, which had entered bankruptcy proceedings. According to recent reports, he is trying to secure a multi-billion dollar deal that will help with that.

About the author

Robbie Elmers

Robbie Elmers is a staff writer for Tech News Space, covering software, applications and services.

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