Manhattan District Attorney's Office probes FTX collapse: Report

Published at: Nov. 14, 2022

Prosecutors with the United States attorney’s office in the Manhattan district of New York have reportedly begun investigating the fall of crypto exchange FTX.

According to a Nov. 14 report from Reuters, a source with knowledge of the investigations said authorities in New York were looking into the collapse of the major crypto exchange following FTX declaring bankruptcy on Nov. 11. The report followed news the state of California’s Department of Financial Protection and Innovation announced it would be investigating the “apparent failure” of FTX.

The ongoing saga with FTX may be shifting to the regulatory and legal implications of a major crypto exchange collapsing. Rumors have circulated around social media platforms and news outlets concerning the firm as well as former CEO Sam Bankman-Fried.

So either the collapse of FTX and SBF's was -- checks notes -- an inevitable result of a speculative bubble managed by 20-something douchebro tech kids -- or a sophisticated global money laundering operation masterminded by -- checks notes -- Joe Biden.Occam's Razor, kids.

— Rick Wilson (@TheRickWilson) November 14, 2022

Cointelegraph reported that as of Nov. 12, the FTX co-founder was “under supervision” in the Bahamas — where many FTX staff were based. The country’s securities regulator also ordered FTX’s assets frozen on Nov. 10, and the exchange was reportedly under investigation for criminal misconduct over its insolvency.

Related: FTX’s ongoing saga: Everything that’s happened until now

Bankman-Fried, also known as SBF, has lost his status as a billionaire following the controversy, with many reports suggesting the former FTX CEO’s net worth may have fallen more than 90%. Amid the exchange’s liquidity crisis and bankruptcy filing, SBF apologized more than once on Twitter, saying he “should have done better” in providing transparency on the situation.

Cointelegraph reached out to the Manhattan District Attorney's Office, but did not receive a response at the time of publication.

Tags
Regulation
Law
Investigation
New York
Ftx
Related Posts
New York proposes to charge crypto companies for regulating them
The New York State Department of Financial Services (DFS) has submitted a proposed change in state laws that would allow it to charge licensed crypto companies for regulating them. While that may seem like an odd proposition, under Financial Services Law (FSL) it is common practice for the DFS to charge licensed non-crypto financial entities for the cost and expenses of maintaining oversight over them. The proposal is led by DFS Superintendent Adrienne Harris, who announced the move via the DFS website on Dec. 1 and has submitted it for public feedback over the following 10 days. Essentially, Harris is …
Regulation / Dec. 2, 2022
FTX paid $12M retainer to a New York law firm before bankruptcy filing
Defunct crypto exchange FTX paid a retainer of $12 million to bankruptcy lawyers as security for payment of its fees and expenses amid Chapter 11 bankruptcy proceedings, shows a court filing dated Dec. 21. Sullivan & Cromwell LLP (S&C), a law firm headquartered in New York City, received $12 million from West Realm Shires Services Inc. on behalf of FTX for legal services. In addition, the filing confirmed that over the past 90 days, i.e., since Aug. 26, 2022, FTX paid nearly $3.5 million to S&C. Based on the information provided, FTX paid at least $15.5 million to avail and …
Regulation / Dec. 24, 2022
Bored Ape creators and other NFT projects investigated by SEC probe
Sources say that the U.S. Securities and Exchange Commission (SEC) probe into Yuga Labs is actually part of a wider investigation into the nonfungible token (NFT) market, which already came to light in March. On Oct. 11, a report from Bloomberg citing a source “familiar with the matter” said the SEC is investigating Yuga Labs over whether certain NFTs are “more akin to stocks” and whether the sales of certain digital assets violate federal laws. However, Cointelegraph understands that the investigation is part of the ongoing SEC probe into the wider NFT market, which is looking at whether certain NFTs …
Nft / Oct. 12, 2022
'Substantial amount' of FTX's assets stolen or missing — bankruptcy counsel
James Bromley, a partner at law firm Sullivan & Cromwell representing debtors in FTX’s bankruptcy case in the District of Delaware, has said that assets at the firm continue to be at risk from cyberattacks. In a livestream of FTX Trading’s bankruptcy proceedings on Nov. 22, Bromley said new FTX CEO John Ray had laid out core objections aimed at getting the firm, remaining employees, and funds through the controversial and public collapse. According to the FTX co-counsel, a core group of employees have continued to work at the exchange to ensure assets were secure and records maintained, but hackers …
Regulation / Nov. 22, 2022
Congress may be ‘ungovernable,’ but US could see crypto legislation in 2023
The United States House of Representatives finally elected a speaker last week, concluding a four-day, 15-ballot ordeal that left many wondering if political gridlock was now the new normal in the U.S., and if so, what the consequences would be. For example, were the concessions made by Republican Kevin McCarthy to secure his election as speaker ultimately going to make it difficult to achieve any sort of legislative consensus, making it impossible for the U.S. to raise its debt ceiling and fund the government later this year? Not all were optimistic. The House of Representatives will be largely “ungovernable” in …
Adoption / Jan. 12, 2023