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U.S. prosecutors opened probe of FTX months before collapse

Crypto exchange FTX was on the radar of federal prosecutors in Manhattan months before its collapse, Bloomberg News reported on Monday citing people familiar with the investigation.

The U.S. Attorney’s Office for the Southern District of New York spent months working on a sweeping examination of cryptocurrency platforms that have U.S. and offshore arms including FTX’s massive exchange operations, the report added

A representative of the concerned U.S. Attorney’s Office declined to comment on the matter, while FTX did not immediately respond.

The implosion of FTX has spread ripples across the industry, hobbling liquidity at firms with exposure to what was once one of the world’s biggest crypto exchanges, prompting investigations by regulators in several countries. It has fanned fears about the future of the crypto industry after FTX outlined a “severe liquidity crisis”.

Earlier this month, FTX filed for U.S. bankruptcy protection and its founder Sam Bankman-Fried resigned as chief executive, after rival exchange Binance walked away from a proposed acquisition.

Several crypto firms have since been bracing for a fallout from the FTX collapse, with many counting their exposure in millions to the beleaguered exchange.

USD 1 billion in client funds missing at crypto firm FTX

At least USD 1 billion of customer funds have vanished from collapsed crypto exchange FTX, according to Reuters sources.

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FTX CEO’s parents bought Bahamas property
FTX CEO Sam Bankman-Fried’s parents and senior executives of the failed cryptocurrency exchange bought at least 19 properties worth nearly USD 121 million in the Bahamas over the past two years, official property records show.

Most of FTX’s purchases were luxury beachfront homes, including seven condominiums in the expensive resort community, Albany, costing almost USD 72 million. The deeds show these properties, bought by a unit of FTX, were to be used as “residence for key personnel” of the company. The documents for another home with beach access in Old Fort Bay.

When asked by Reuters why the couple decided to buy a vacation home in the Bahamas and how it was paid for — whether in cash, with a mortgage or by a third party such as FTX — a spokesman for the professors said only that Bankman and Fried had been trying to return the property to FTX.

“Since before the bankruptcy proceedings, Mr. Bankman and Ms. Fried have been seeking to return the deed to the company and are awaiting further instructions,” the spokesperson said, declining to elaborate.

While it is known that FTX and its employees bought real estate in the Bahamas, where it established its headquarters in September last year, the property records show the scale of their buying spree and the intended use of some of the real estate.


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