Cryptocurrency exchange FTX is facing a criminal investigation in the Bahamas after the company filed for bankruptcy and essentially went bankrupt last week.
FTX, co-founded by former crypto billionaire and top Democratic donor Sam Bankman-Fried, reported that around $1 billion in crypto funds had vanished due to “unauthorized transactions”. The company is based in the Bahamas and filed for bankruptcy last week, leading to an investigation by the country’s securities commission, Bloomberg reported Sunday.
“In light of the global FTX collapse and the interim liquidation of FTX Digital Markets Ltd., a team of financial investigators from the Financial Crimes Investigation Branch are working closely with the Bahamas Securities Commission to investigate possible misconduct,” he said. declared a police. the spokesperson told the outlet.
Bankman-Fried resigned as CEO of FTX last week in a letter that also filed for Chapter 11 bankruptcy.
INSIDE THE CRYPTO EXCHANGE FTX COLLAPSE: EVERYTHING YOU NEED TO KNOW
FTX was the third largest cryptocurrency market in the world early last week when it announced liquidity problems and would need a massive cash infusion to stay afloat.
READ ON THE FOX BUSINESS APP
Binance, the world’s largest cryptocurrency marketplace, initially stepped in and offered to buy the company, but backed out of the deal after reviewing FTX’s finances.
Reuters, citing two people familiar with the matter, reported that at least $1 billion in client funds had disappeared, and people told the news outlet that Bankman-Fried had secretly transferred $10 billion of client funds from FTX to its trading company Alameda Research.
CLICK HERE TO LEARN MORE ABOUT FOX BUSINESS
The two sources told Reuters that Bankman-Fried – in a meeting he confirmed took place – shared documents with other top executives that revealed the financial hole.
Spreadsheets reportedly showed this between $1 and $2 billion USD some of the funds were not recorded in Alameda’s assets and that the spreadsheets did not indicate where the money had been transferred.
GET FOX BUSINESS ON THE GO BY CLICKING HERE
FTX is also reportedly facing potential investigations by the US Department of Justice and the US Securities and Exchange Commission.