CFTC & SEC are Investigating Whether FTX Properly Handled User Funds
U.S. regulators are probing whether FTX.com properly handled user funds. They are also looking into Sam Bankman-Fried’s relationship with other entities related to the exchange.
Events surrounding the allegedly insolvent crypto exchange FTX have taken a new twist as regulators in the United States have started to probe the platform’s financial activities.
According to Bloomberg, the U.S. Securities Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) are investigating whether FTX.com properly handled users’ funds. The two regulatory agencies are also looking into the relationship between other financial entities connected to Sam Bankman-Fried’s crypto empire.
FTX Probe By the SEC Started A Few Months Ago
The scrutiny by the SEC and CFTC comes in the wake of the liquidity crisis at FTX.com that has led to Binance announcing its intention to acquire the platform after all the due diligence is done.
The regulators want to get to the bottom of the FTX financial situation in addition to looking into the relationship between FTX.com, its American subsidiary FTX.US and the Mr Bankman-Fried-linked trading firm Alameda Research.
The team at Bloomberg added that the SEC investigation into FTX began ‘months ago,’ citing people familiar with the matter.
At the time of writing, representatives of the SEC, the CFTC, FTX and Binance are yet to comment on the alleged investigations into the crypto exchange.
We Are About to Trade to New Lows — Bitmex’s Arthur Hayes
Regarding the effects of the FTX situation on the direction and mood of the crypto markets, Bitmex’s founder and former CEO believe that the bear market is not over.
He explained, ‘While I am supremely bullish on the prospects of crypto in 2023 (I know the date keeps slipping, but I reserve the right to change my mind in the face of market conditions), I believe we are about to trade to new lows as everyone wonders which crypto household name will go bankrupt next for lending money to FTX / Alameda.’
Mr Hayes made the comments in a recent blog post in which he also described FTX’s Sam Bankman-Fried as ‘a once in a generation trading talent.’ He also referred to Binance CEO Changpeng Zhao as ‘Baron CZ’ for expressing interest in acquiring FTX.
~By John P. Njui~
