Bitcoin News and Finance
SEC, DOJ Investigate FTX — Regulators Suspect Crypto Exchange Mishandles Customer Funds Skip to main content

SEC, DOJ Investigate FTX — Regulators Suspect Crypto Exchange Mishandles Customer Funds

SEC, DOJ Investigate FTX — Regulators Suspect Crypto Exchange Mishandles Customer Funds

The U.S. Securities and Exchange Commission (SEC) and the Department of Justice (DOJ) are reportedly investigating cryptocurrency exchange FTX. The crypto firm is suspected of mishandling customer funds and breaking securities laws. Regulatory probes are among the key reasons why Binance walked away from the acquisition of FTX.

U.S. Regulators and DOJ Investigate Crypto Exchange FTX

Several U.S. authorities are reportedly probing FTX, the embattled cryptocurrency exchange founded by Sam Bankman-Fried.

The U.S. Department of Justice (DOJ) and the Securities and Exchange Commission (SEC) are looking into the turmoil surrounding FTX.com and its liquidity crisis, Bloomberg reported Thursday, citing a person familiar with the matter. The Justice Department prosecutes criminal violations, such as fraud, while the SEC focuses on securities law violations.

Moreover, the SEC and the Commodity Futures Trading Commission (CFTC) are investigating whether FTX.com mishandled customer funds, the publication conveyed, adding that the financial regulators are also looking into the firm’s relationships with other parts of Bankman-Fried’s crypto empire.

According to the Wall Street Journal, the SEC has been investigating FTX for months, with a focus on the firm’s U.S. arm, FTX US. The securities regulator has now expanded its investigation into the crypto platform.

The SEC believes that some of the dozens of crypto tokens listed on the FTX US exchange and the company’s lending product may constitute securities under U.S. securities laws and should have been registered with the SEC before being sold to investors. If this is the case, then FTX’s handling of customer assets might also violate U.S. exchange laws.

SEC Chairman Gary Gensler stressed his concerns Wednesday during a Healthy Markets Association conference amid uncertainties surrounding FTX. Emphasizing that the crypto industry has been operating outside of traditional financial markets’ oversight, he reiterated:

I’ve been saying this for well over a year now in this job: Come in, get registered, come within the securities laws.

Gensler emphasized the risks from crypto companies “commingling” key intermediary functions where the same companies serve multiple roles, such as exchanges and market makers.

Regulatory investigations and reports that FTX may be mishandling customer funds have caused concerns for Binance which was considering acquiring FTX.com. Following due diligence, the company decided not to proceed with the acquisition.

What do you think about U.S. regulators and the DOJ investigating FTX? Let us know in the comments section below.

Labels:

Comments

Post a Comment

Popular posts from this blog

Custodial Lightning Network Service Attack Discovered by LN ‘Newbie’ — Hacker Strikes 6 LN Custodians

On September 18, a Redditor posted to the r/bitcoin forum and explained how he discovered a way to “attack [the] lightning Network’s custodial services.” The Reddit account dubbed “Reckless Satoshi” wanted to figure out if a “discrepancy between real routing fees and service’s transaction fee can be exploited for a profit.” The researcher disclosed that he wanted to see how large the damage could be and said “it is bad.” 6 Lightning Network Custodial Services Attacked, Researcher Discloses Findings to Offenders Prior to Public Disclosure A Redditor called Reckless Satoshi published a disclosure post on r/bitcoin this past Saturday and disclosed how he had found a vulnerability with routing fees and some of the Lightning Network’s custodial services. The research attack was done in good faith and after it was complete he disclosed the bugs to the offending services before publishing his findings. Reckless Satoshi used the Lightning Network (LN) attack on six different services incl...
Post a Comment
Read more

Axie Infinity Down 40% Since Last Week’s Price High, Protocol Revenue Outshines Competitors

Last week, the game token leveraged within the Axie Infinity gaming universe skyrocketed to all-time highs, while other crypto markets remained extremely lackluster. During the last seven days, Axie Infinity’s platform token has dropped significantly in value shedding more than 12%. Meanwhile, the game platform’s smooth love potion token has slid over 8% over the last 24 hours. Axie Infinity Down More Than 40% Since All-Time High Not too long ago, the axie infinity (AXS) token was a topical conversation because it reached an all-time high on July 15. At the time, AXS managed to capture $28.93 per unit and since then it has shed 12.8% during the last seven days. The axie infinity (AXS) token is used within the blockchain-based game that involves battles between token-based creatures called “Axies.” AXS is used for the game’s governance system as well as other actions within the game. At the time of writing axie infinity (AXS) is exchanging hands for $16.70 per coin. AXS/USD on Ju...
Post a Comment
Read more

Play-to-Earn Game From Polker (PKR) Exchange Listing – Endorsed by Akon

The Play-to-Earn NFT based Polker.Game ‘s native token $PKR has been officially listed on the popular centralized exchange BitMart. Polker.game has been in the spotlight recently as Akon, the American R&B superstar and record producer gave his official endorsement of polker stating that the “game is revolutionary” and that Polker is “hands down.. the best play to earn, NFT game in the space.”. With the BitMart listing and celebrity endorsement from Akon, Polker is perfectly positioned to become a major player in the Play-to-Earn league. Watch Akon’s Video Here What is Play-to-Earn? Although not a new concept, play-to-earn has become a trending term due to the popularity of the NFT game AXIE infinity. In the past, previous play-to-earn games have also achieved success – however, thanks to the huge amount of development in the blockchain space in recent years the gaming experience is now massively improved. Play-to-Earn games are essentially free to play and open to anyone and...
Post a Comment
Read more

China to Crack Down on Copyright Infringement Through NFTs

Authorities in China are going after creators of digital collectibles based on other people’s works of art, the use of which was not authorized. The government offensive is part of a campaign to combat online copyright infringement and piracy with the participation of several departments. Regulators in China Move to Strengthen Copyright Supervision of Online Platforms The National Copyright Administration of China (NCAC) has recently launched a campaign against copyright infringement and piracy on the internet, together with the Ministry of Industry and Information Technology, the Ministry of Public Security, and the State Internet Information Office of the People’s Republic. A major objective of the initiative is to improve copyright supervision of online businesses by investigating cases involving the sale and distribution of infringing products on short video, live broadcast and e-commerce platforms, and promptly dealing with infringing content, the agency announced in a press r...
Post a Comment
Read more
Blogarama - Blog Directory