Federal investigators are examining whether FTX founder Sam Bankman-Fried was involved in the failure of TerraUSD (UST) and Luna.
Along with other offshore bitcoin trading platforms under investigation, FTX is being examined for potential violations of U.S. money-laundering laws.
Over the past month, FTX has been in different news articles after they became the victim of a $400 million hack. This incident rattled the crypto world and later turned into a series of numerous developments which later wrecked the exchange.
Analysts reveal that this downfall could have been caused by a high-ranking source who unintentionally revealed their identity. On November 14, the fallen exchange's CEO, Sam Bankman-Fried made a Twitter thread that attracted several opinions and speculation among the crypto community on the network.
The former CEO of FTX also made a recent presentation on November 30 at the DealBook Summit, where he apologized or admitted failure at least twelve times during the course of the presentation.
But despite all these incidents and the crypto market still processing FTX's bankruptcy, federal prosecutors in the United States are looking into possible involvement by FTX founder Sam Bankman-Fried in the failure of TerraUSD (UST) and Luna.
May 2022 witnessed the stablecoin UST losing its peg to the dollar, leading to the demise of the Terra ecosystem. The Luna Foundation Guard (LFG) was forced to sell 80,000 Bitcoins, which led to a severe market collapse.
Federal authorities are looking into whether FTX founder Sam Bankman-Fried and his hedge fund Alameda planned the trade to bring about the crash, the New York Times says today.
The Securities and Exchange Commission and federal prosecutors investigated whether FTX's transfer of consumer monies to Alameda was illegal. Last month, an intense dive into deposits revealed a $8 billion hole in the exchange's accounts, leading to the company's demise. When FTX declared bankruptcy on November 11, Bankman-Fried resigned as the company's CEO.
According to unnamed sources cited by the New York Times, US prosecutors in Manhattan are looking into the likelihood that Bankman-Fried altered prices to benefit his own businesses.
The article also revealed that the inquiry is still in its beginning phases. It is still being determined whether or when prosecutors started looking into the TerraUSD and Luna agreements or whether they discovered any misconduct by Bankman-Fried.
According to three people with knowledge of the inquiry, FTX is also being looked at for possibly breaking U.S. money-laundering laws, which demand that money-transfer companies know who their clients are and report any possible unlawful behavior to law enforcement.
This probe, initially made public by Bloomberg News, began before FTX filed for bankruptcy. The actions of other offshore cryptocurrency trading sites are also being investigated.
What are your predictions about this investigation into FTX? Kindly share them with us in the comments section.
