By Reuters | Updated: 8 December 2022
US federal prosecutors are investigating whether FTX’s founder Sam Bankman-Fried manipulated the market for two cryptocurrencies this May that led to their collapse and resulted in the implosion of his own cryptocurrency exchange, the New York Times reported on Wednesday.
The prosecutors are looking into whether Bankman-Fried controlled the prices of two interlinked currencies, TerraUSD and LUNA, to benefit the entities he controlled including FTX and Alameda Research, the report said.
The investigation is in its early stages, the newspaper said, adding that it is not clear whether prosecutors have determined any wrongdoing by Bankman-Fried, or when they began looking at the TerraUSD and Luna trades.
US federal prosecutors are investigating whether FTX’s founder Sam Bankman-Fried manipulated the market for two cryptocurrencies this May that led to their collapse and resulted in the implosion of his own cryptocurrency exchange, the New York Times reported on Wednesday.
The prosecutors are looking into whether Bankman-Fried controlled the prices of two interlinked currencies, TerraUSD and LUNA, to benefit the entities he controlled including FTX and Alameda Research, the report said.
The investigation is in its early stages, the newspaper said, adding that it is not clear whether prosecutors have determined any wrongdoing by Bankman-Fried, or when they began looking at the TerraUSD and Luna trades.
The crypto exchange filed for bankruptcy last month after a liquidity crisis that saw at least $1 billion (roughly Rs. 8,200 crore) of customer funds vanish. FTX’s demise comes after a string of meltdowns that have taken down other key players including Voyager Digital and Celsius Network and led some global investors to question the viability of the cryptocurrency sector.
In recent weeks, US authorities have sought information from investors and potential investors in FTX, according to two sources with knowledge of the requests.
Federal prosecutors in New York are asking for details on any communications such firms have had with the crypto firm and its executives, including Bankman-Fried, the sources said. Bloomberg previously reported the information requests.
FTX and Alameda research did not respond to Reuters request for comments.
© Thomson Reuters 2022
