US prosecutors investigating ex-FTX boss for possible fraud

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Crypto Regulation
US prosecutors investigating ex-FTX boss for possible fraud

On Friday, it was reported that American authorities are looking into fraud allegations leveled against Sam Bankman-Fried, the disgraced founder FTX. After the exchange filed for Chapter 11 bankruptcy in the United States on November 11, there were rumors that authorities were investigating whether hundreds of millions of dollars had been unlawfully transferred to the Bahamas.

Sam Bankman-Fried, FTX’s founder and CEO, is a target of an investigation

The US government is currently probing how the former operator of FTX was able to transfer monies held by the exchange outside of the US as the firm was rapidly approaching insolvency. Hundreds of millions of dollars may have been fraudulently transferred to the Bahamas around the time FTX filed for bankruptcy in Delaware on November 11, according to an unnamed source.

The government is specifically examining FTX’s handling of clients’ cash and assets, and sources say that this week, Justice Department representatives met with FTX’s court-selected inspectors to discuss the documents the government hopes to subpoena as part of that investigation. It has also been stated that FTX is being scrutinized for alleged unlawful activities relating to the transfer of funds to the now-defunct investment firm Alameda Research, which was also formed by Bankman-Fried.

A statement released on Friday indicated that the panel would hear from both newly appointed CEO John Ray and FTX founder and previous CEO Bankman-Fried on Tuesday. According to the committee’s announcement, the hybrid hearing will kick off on Tuesday, March 5 at 10 a.m. ET. 

Early crypto developers compete for market share

Last month, FTX declared bankruptcy and CEO Bankman-Fried quit after $6 billionĀ  was withdrawn from the platform and rival exchange Binance backed out of a rescue arrangement. It was claimed that in the months before FTX’s collpase, former FTX CEO Bankman-Fried was involved in a bitter war for market supremacy with Binance CEO Changpeng Zhao.

During the early investor’s attempt to sell its shares in FTX over a year ago, Bankman-Fried allegedly conducted “rude verbal attacks” towards personnel of the Binance team, as recounted by Zhao. It was reported in 2017 that Binance had parted ways with FTX, the company that had originally invested in it.

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Ifeanyi Egede

Ifeanyi Egede is an experienced and versatile writer and researcher. He has keen interest in blockchain technology, cryptocurrencies, NFTs, Web3, metaverse, fintech and emerging technologies. He has tons of published works both online and in the print media. He has close to a decade of writing experience. When he is not writing, he spends time with his lovely wife and kids.