FTX Was Under US Investigation Months Before the Implosion

Damian Williams of the US Attorney’s Office for the Southern District of New York was reportedly working on an investigation of Sam Bankman-Fried’s crypto-empire several months before it collapsed.

• The probe was a part of a wider effort and had compliance with the Bank Secrecy Act as its main focus.
• At the time of writing, it is unknown how far the probe progressed and whether it uncovered anything before FTX filed for bankruptcy.
• FTX’s issues and irresponsible behavior became known after the company went to its main rival, Binance, for help to solve a severe illiquidity crunch.
• There are currently two bankruptcy filings for FTX, one chapter 11 filed in Delaware, and one chapter 15 filed in New York by the Bahaman liquidators.
• The ongoing investigation and liquidation of the affected companies keep uncovering more and more troubling information about how the companies were run.
• At one point FTX loaned Alameda Research $10 billion in users’ funds.
• Recent court documents indicate that the Bahaman government might have been behind a post-bankruptcy hack of FTX and that the chapter 15 bankruptcy filing might be an attempt to obstruct the proceedings in Delaware.

This article originally appeared on The Tokenist