An advertisement for the cryptocurrency Bitcoin is displayed on a street on February 17 in Hong Kong. Bitcoin fell to a two-year low on Wednesday.
Kin Cheung / AP
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Kin Cheung / AP
An advertisement for the cryptocurrency Bitcoin is displayed on a street on February 17 in Hong Kong. Bitcoin fell to a two-year low on Wednesday.
Kin Cheung / AP
Sticky cryptocurrency exchange FTX, which is short on billions of dollars, is seeking bankruptcy protection after it collapsed this week.
FTX and its CEO and founder Sam Bankman-Fried are being investigated by the Department of Justice and the Securities and Exchange Commission to determine whether any criminal activity or securities violations were committed. are not. The person could not publicly discuss the details of the investigations and spoke to the Associated Press on condition of anonymity.
The investigation is focusing on the possibility that the company may have used customer deposits to place bets at Bankman-Fried’s hedge fund, Alameda Research. In traditional markets, brokers are expected to separate client funds from other company assets. Violations may be punished by regulatory authorities.
Earlier this week, FTX agreed to sell itself to bigger rival Binance after experiencing the crypto equivalent of banking. Customers left the exchange after worrying about whether FTX had enough capital.
The crypto world had hoped that Binance, the world’s largest cryptocurrency exchange, could rescue FTX and its depositors. However, after Binance had a chance to look at FTX’s books, it became clear that the smaller exchange’s problems were too big to deal with.
