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HomeBusinessMarketFeds said to investigate FTX's SBF over possible crypto price manipulation, while...

Feds said to investigate FTX’s SBF over possible crypto price manipulation, while senators want his testimony

FTX founder Sam Bankman-Fried is being investigated by federal prosecutors over whether or not he manipulated costs of two cryptocurrencies to profit his corporations, in keeping with a brand new report, and has additionally been ordered to testify earlier than a Senate committee in regards to the collapse of his crypto platform.

The New York Times reported Wednesday night time that Manhattan-based federal prosecutors are investigating whether or not Bankman-Fried steered costs of TerraUSD and Luna to profit FTX and his Alameda hedge fund. Terra and Luna noticed greater than $50 billion in market worth worn out when they collapsed in May. That contributed to a wider crypto crash, and finally the implosion of FTX.

The Times reported the probe is in its early levels, and is a part of a wider investigation into FTX’s collapse and the potential misappropriation of billions of {dollars} of shoppers’ funds, which are actually lacking. Additionally, the Times confirmed a November Bloomberg report that FTX was additionally being investigated for probably violating U.S. money-laundering legal guidelines months earlier than FTX’s collapse.

FTX, as soon as one of many world’s largest cryptocurrency exchanges, collapsed and filed for Chapter 11 bankruptcy protection in November after operating into liquidity points. Bankman-Fried resigned as CEO, and noticed his private fortune of about $23 billion all however evaporate. About $8 billion stays lacking from FTX’s steadiness sheet; Bankman-Fried stated in a Bloomberg interview the funds were “misaccounted,”

Also see: As FTX collapse spurs calls for tighter rules, ‘we’re already suited up’ on crypto, SEC chief Gensler says

Separately, the Senate Banking Committee late Wednesday ordered Bankman-Fried to testify in regards to the collapse of FTX on Dec. 14, and stated it’s ready to problem a subpoena if he doesn’t voluntarily comply with comply by the tip of the day Thursday.

“FTX’s collapse has caused real financial harm to consumers, and effects have spilled over into other parts of the crypto industry. The American people need answers about Sam Bankman-Fried’s misconduct at FTX,” Sens. Sherrod Brown, D-Ohio, and Pat Toomey, R-Pa., stated in a press release. 

“You must answer for the failure of both entities that was caused, at least in part, by the clear misuse of client funds and wiped out billions of dollars owed to over a million creditors,” the senators stated in a letter to Bankman-Fried.

On Tuesday, Binance Chief Executive Changpeng Zhao referred to as Bankman-Fried a “master manipulator” and “one of the greatest fraudsters in history.”

Read extra: Coinbase CEO Brian Armstrong says it’s ‘baffling’ that Sam Bankman-Fried isn’t in custody

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