FTX’s Sam Bankman-Fried faces market manipulation investigation: report

U.S. federal prosecutors are investigating whether FTX founder Sam Bankman-Fried rigged the market for two cryptocurrencies in May this year, leading to their collapse and the implosion of his own cryptocurrency exchange, the New York Times reported on Wednesday.

Prosecutors are investigating whether Bankman-Fried controlled the prices of two linked currencies TerraUSD and LUNA to benefit the companies it controls, including FTX and Alameda Research, the report said.

The investigation is at an early stage, the newspaper said, adding that it’s not clear whether prosecutors have found wrongdoing by Bankman-Fried or when they began looking into TerraUSD and Luna’s deals.

A spokesman for the Manhattan U.S. Attorney’s Office did not immediately respond to requests for comment.

Regulators around the world, including the Bahamas, where FTX is based, and the United States are investigating the role of FTX’s top executives, including Bankman-Fried, in the company’s stunning collapse, Reuters previously reported.

The collapsed cryptocurrency The exchange remains the subject of an “active and ongoing investigation” by Bahamian authorities, Bahamian Attorney General Ryan Pinder said last month while praising the Bahamas’ regulatory system and the speed with which it responded to the crisis.

That crypto The exchange filed for bankruptcy last month after a liquidity crunch caused at least $1 billion (around Rs. 8,200 billion) in client funds to disappear. FTX’s demise comes after a series of meltdowns that have taken down other major players such as Voyager Digital and Celsius Network and caused some global investors to question the viability of the cryptocurrency sector.

In recent weeks, US authorities have been soliciting information from investors and potential investors in FTX, according to two sources with knowledge of the inquiries.

Federal prosecutors in New York are asking for details of any communications such firms have had with the crypto firm and its executives, including Bankman-Fried, the sources said. Bloomberg had previously reported on the information requests.

FTX and Alameda Research did not respond to Reuters requests for comment.

© Thomson Reuters 2022