Criminal Misconduct?
Investigators step in on FTX collapse
11/13/2022, 11:55 p.m
Hundreds of millions of dollars in crypto assets are said to have disappeared in connection with the bankruptcy of the crypto exchange FTX. This calls the financial investigators of the law enforcement agencies on the plan in the Bahamas.
The Bahamas police have launched an investigation after crypto exchange FTX filed for bankruptcy. In light of FTX’s global collapse, a team of financial investigators is working closely with the island nation’s securities regulator to investigate whether there has been any criminal wrongdoing, police said on Sunday. The Bahamas is where FTX’s international operations are based, as well as retired boss Sam Bankman-Fried.
The securities regulator had previously stated that the company was suspected of having embezzled customer funds, among other things. Bankman-Fried’s international crypto platform FTX.com ran into payment difficulties a week ago after doubts about capital reserves led to customer flight and billions in funds being withdrawn. On Wednesday it initially looked as if the competitor Binance would take over most of the ailing group. But that plan fell through the next day.
On Thursday, the Bahamian securities regulator said it had frozen certain assets of FTX and requested a liquidator to handle it. According to FTX, it applied for bankruptcy protection in the USA on Friday, and Bankman-Fried announced his resignation as boss. The legal counsel of FTX’s US subsidiary, Ryne Miller, said on Twitter on Saturday that there had been “unauthorized transactions”. British analytics firm Elliptic suggested that $473 million in crypto assets were stolen from FTX on Friday night. They would be exchanged for the cryptocurrency ether on decentralized exchanges – a procedure that hackers often used to forestall a seizure of their loot.
As a 30-year-old star entrepreneur, Bankman-Fried had graced the front pages of well-known US business journals just a few months ago. His company, which was valued at $32 billion by investors, collapsed completely within a few days. The FTX debacle also weighed on the already badly battered crypto market. Bankman-Fried dismissed rumors that he wanted to flee to Dubai to avoid possible prosecution.