Recent Unexpected fall down Major crypto exchange FTX has attracted the attention of investors around the world, but recently revealed information suggests that Sam Bankman-Fried’s company was on the radar of federal prosecutors long before FTX filed for bankruptcy.
The US Attorney’s Office for the Southern District of New York, led by US Attorney Damien Williams, devoted several months to investigating crypto exchanges that maintain US and foreign-based branches. As part of these proceedings, Manhattan prosecutors began looking into FTX’s large-scale exchange operations, according to sources familiar with the investigation. Told Bloomberg.
The investigation, which reportedly began months before the exchange’s collapse, indicates that FTX’s operations were viewed with suspicion by some US prosecutors. Available information from unnamed sources related to the investigation suggests that prosecutors were particularly interested in examining FTX’s compliance with the country’s Bank Secrecy Act.
Passed by Congress in 1970, the law introduced anti-money laundering measures in the US by obliging financial industry players to maintain records and file reports for the purpose of tax, criminal and regulatory matters.
Meanwhile, following the collapse of his empire, Bankman-Fried, the founder and former CEO of FTX, is trying Raising fresh capital with the aim of making the clients of the collapsed exchange whole despite the bankruptcy filing.
The entrepreneur has announced that it is “meeting in person” with both potential investors and regulators to discuss what they can do for customers. “And after that, investors. But first, customers,” Bankman-Fried said in a Tweet,
At the same time, as FTX continues to move through its voluntary Chapter 11 bankruptcy proceedings, some industry observers are concerned about the risk of a wider infection spreading across the crypto ecosystem.
Among others, Joseph Ayyub, an analyst at international financial industry player Citi until recently Told He believed that the overall crypto system was facing a “serious risk of widespread infection to the ecosystem”, but also found it unlikely that such contagion would spread to legacy financial markets.
“Within cryptocurrencies, it is unclear how far and how deep this goes. The contagion could last for quite some time,” said the bank’s analyst.
According to Ayyub, the current market crisis “could provide an opportunity for other exchanges to potentially take a larger share of the market as the second largest derivatives and spot exchange has filed for Chapter 11”.
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