Two Democratic members of the United States Senate have called on the Justice Department to investigate FTX’s bankruptcy and possibly prosecute those involved in the violations.
In a November 23 letter to United States Attorney General Merrick Garland and Assistant Attorney General Kenneth Polite, Senators Elizabeth Warren and Sheldon Whitehouse called on the Justice Department to launch an investigation into the FTX crash with the “maximum scrutiny”. The lawmakers cited the impact that the collapse of a major firm in the cryptocurrency space had had on related businesses — the lending companies, including Genesis and BlockFi, which halted trading. and funds that retail FTX investors might not get back.
The senators specifically singled out former FTX CEO Sam Bankman-Fried for his role in the controversy, including his deleted tweet stating that funds were “safe” on the exchange and his attempts to downplay the issues. liquidity of the company. Warren and Whitehouse echoed characterizations of FTX’s management in the company’s bankruptcy proceedings, which referred to Bankman-Fried and others as “inexperienced and unsophisticated.”
“FTX’s downfall was not simply the result of sloppy business and management practices, but appears to have been caused by intentional and fraudulent tactics employed by Mr. Bankman-Fried and other FTX executives to enrich themselves,” the letter said. “We urge the Department to focus on these ‘fatalities’ as it investigates and, if deemed necessary, prosecute the individuals responsible for their harm.”
It is unclear whether the Justice Department intends to launch an investigation into FTX, but financial regulators and lawmakers around the world have taken action following the exchange’s collapse. In the Bahamas – where Bankman-Fried and many of FTX’s executives were based at press time – Bahamian financial investigators and securities regulators reportedly investigated possible criminal conduct. Turkey’s Financial Crimes Investigation Agency also announced on November 14 that it had launched an investigation into individuals and entities associated with FTX.
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