On November 9th, the news broke that various US regulators are launching investigations into FTX.
US Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) launched a joint investigation into the troubled crypto exchange FTX.
According to a Bloomberg report shared on November 9th, SEC and CFTC aim to investigate whether FTX “mishandled customer funds.” On top of that, with the investigation, both regulators aim to uncover FTX and FTX US organization structures.
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Moreover, SEC and CFTC aim to untie the connections between FTX and Alameda Research. Based on some sources, SEC has been looking into FTX lending activities and its subsidiary FTX US for quite some time.
The person familiar with the matter revealed that the SEC contacted FTX lawyers for additional information revealing the company's relationship with FTX US.
However, the SEC and CFTC are not the only US regulators interested in FTX. The report shared by the Wall Street Journal revealed that the United States Department of Justice (DOJ) is investigating FTX for involvement in a possible fraud case.
It is worth noting that in the middle of October, the Texas State Securities Board (TSSB) launched an investigation on FTX Trading, FTX US, and Sam Bankman-Fried over whether FTX was offering unregistered securities in the United States.
The investigations of the SEC, DOJ, and CFTC only add to the list of troubles Bahamian cryptocurrency exchange FTX is currently facing. While dealing with major “liquidity crunches” for a little bit longer than a day, FTX saw a light at the end of the tunnel when Binance signed a “non-binding LOI” planning to acquire FTX.
However, everything went crashing down when on November 9th, Binance abandoned the deal stating that FTX’s issues were beyond Binance’s “control or ability to help.”