FTX was under the federal radar long before its collapse: Report
FTX
Reports suggest that crypto exchange FTX was on the radar of federal prosecutors long before its recent collapse.
According to a Bloomberg article that quotes persons familiar with the situation, Federal prosecutors from the US Office for the Southern District of New York were already looking into FTX's "massive exchange operations" as part of a larger investigation into cryptocurrency platforms with US and foreign subsidiaries.
Watch |The FTX bankruptcy scandal: Crypto exchange launches review of its global assets
Bloomberg reports that the US attorney's office in Manhattan is known for handling complicated financial crime cases, many of which involve cryptocurrencies.
The sudden collapse of FTX, one of the biggest cryptocurrency exchanges in the world, willbe the subject of a hearing on December 1st, announced the USSenate Agriculture Committee on Thursday.
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Also read |Report reveals how FTX founder Sam Bankman-Fried begged for a rescue but failed to save his company
Debbie Stabenow, chair of the Committee, also urged Congress to approve the bipartisan Digital Commodities Consumer Protection Act. She claimed that it "would have prohibited the misconduct and risky behaviour undertaken by FTX."
On November 11 FTX filed for protection from its millions of creditors under the US Bankruptcy law.
The declaration of bankruptcy left an estimated one million customers and other investors facing enormous losses worth billions of Dollars. As recently as last month, FTX was considered the world's second-largest cryptocurrency platform, which was at one point valued at $32 billion.
As a result of the firm's failure, there is a liquidity crisis that has spread throughout the cryptocurrency sector and caused a sharp decline in the price of bitcoin and other digital assets.
Reuters reports that as per the bankruptcy filing, the cryptocurrency exchange owes fifty of its biggest creditors $3.1 billion, $1.45 billion of which is owed to the top ten creditors.
(With inputs from agencies)
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