SEC Expands Investigation Into FTX Handling of Customer Funds During Liquidity Crunch

US regulators are in the midst of looking into the relationship between embattled crypto exchange FTX and its subsidiaries, as well as its handling of customers’ funds during the highly-publicized liquidity crunch that ultimately led to the buyout offer from rival exchange Binance.

According to people familiar with the matter cited by Bloomberg, The SEC and the Commodity Futures Trading Commission are poring over the relationship between and its US subsidiary, FTX US, as well as disgruntled CEO and founder Sam Bankman-Fried’s trading house Alameda Research. Although the SEC’s investigation into the crypto-lending activities of FTX US was launched months ago, regulators have expanded the probe to analyze the liquidity crisis and subsequent buyout announcement of FTX’s non-US operations by Changpeng Zhao’s Binance.

Since CEO Zhao’s shocking revelation of wanting to take over FTX, scrutiny has been swirling throughout the crypto world about whether or not Binance conducted adequate due diligence, prompting Zhao to potentially reconsider his offer.

Information for this briefing was found via Bloomberg and the sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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