FTX: Sam Bankman-Fried faces SEC’s wrath in new probe

Sahana Kiran
Source – Newshubweek

The crypto industry has witnessed the downfall of several projects this year. The crypto community certainly did not expect to see prominent exchange, FTX on the list. The exchange’s collapse instigated nothing but chaos in the market. With the platform suspending withdrawals, government authorities in the US were alerted. Just yesterday, the Securities and Exchange Commission [SEC] as well as the Department of Justice [DOJ] revealed that they had begun a probe into the exchange.

Earlier today, it was brought to light that Sam Bankman-Fried, the CEO and founder of FTX would be investigated by the SEC.

The FTX CEO was being investigated for any possible violations of securities laws. The individual, who wanted to remain anonymous since the matter is private, told Bloomberg that the SEC is looking into Bankman-Fried’s recent actions that contributed to the liquidity problem at FTX.com.

This reportedly came as a part of the investigation launched recently by the SEC, DOJ, and Commodity Futures Trading Commission [CFTC]. These agencies were looking into whether customer funds on the exchange were being mishandled by the management.

In addition to FTX, Alameda Research was also being probed. It should be noted that SBF had reportedly transferred around $4 billion from FTX into Alameda earlier this year. This could be one of the reasons why the platform was being dragged into all the investigations.

Are FTX employees trying to sell parts of the business?

A recent report from Bloomberg highlighted that employees of the US-based platform FTX.US were trying to put up assets as well as parts of the firm on sale.

The employees were putting forward Embed, a stock-clearing platform that was acquired by FTX back in June 2022. This was reportedly being done without SBF’s knowledge.

While SBF continues to assure that funds on the firm’s US wing were safe, the latest news instilled fear among users.