the judicial system – US authorities are said to be investigating FTX in the aftermath Loss of customer money. They would even have taken an interest in cryptocurrency exchanges, long before the carnage started.
FTX foreign exchange transactions have been scrutinized by US regulations
according to Article Nov. 21, from Bloomberg, The US Attorney’s Office for the Southern District of New York has reportedly investigated FTX, long before the cryptocurrency exchange crash. For months, authorities have reportedly been looking into crypto platforms that have subsidiaries in the US and abroad.
The attorney general’s office was then going to start analyzing FTX’s foreign exchange transactions. The investigations would have focused above all on verifying compliance with Bank secrecy lawwhich legally obliges financial institutions to make provisions for Fighting money laundering and terrorist financing.
FTX in the sight of regulation?
The authorities had crypto platforms in their sights, which would falsely claim that they did not provide their services to clients in the United States. However, there is no information whether the investigations were or were not conclusivebefore the collapse of FTX.
After the fall of the cryptocurrency exchange, the federal investigation could take new trend. Attorneys general and regulators, including the SEC and CFTC, are said to be seeking support from new FTX CEO John Ray III in their investigation.
Citing the former prosecutors, the Bloomberg article notes that authorities will need to determine whether or not FTX they cheated their clients as to how they will hold their assets. Investigators will need to be able to prove that someone within the company acted for their own gain, using a channel such as phone or email, in order to establish that there was electronic fraud.
Thanks to FTX’s bankruptcy, plaintiffs will have access to Existing documents related to the company, and choose those who can call them. Anand Sethyan, a former federal prosecutor who works for Crowell & Moring, said investigators will seek to obtain evidence Witness statement and the Communication between employees Through different channels – Email, Slack, etc..
John Ray III revealed FTX’s questionable practices when he told the bankruptcy court, I“The complete absence of reliable financial information” and having more than $1 billion in loans, which were given to Sam Bankman-Fried and other cryptocurrency exchange executives by Alameda Research. The software is also allegedly used to conceal the use of customer funds. Despite these revelations, the authorities have not charged anyone with wrongdoing until today.
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