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Sam Bankman-Fried

Portfolio > Alternative Investments > Cryptocurrencies

SEC Probes FTX’s Sam Bankman-Fried as His Crypto Empire Crumbles

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Sam Bankman-Fried is being investigated by the U.S. Securities and Exchange Commission for potential violations of securities rules as the regulator deepens its probe into his crumbling FTX crypto empire, according to a person familiar with the matter.

FTX, the American platform FTX US, and Bankman-Fried’s trading house Alameda Research are already under investigation by the SEC, Bloomberg News reported Wednesday. The Justice Department is also looking into the situation.

The SEC is scrutinizing Bankman-Fried’s involvement in recent moves that helped push, one of the world’s largest exchanges, into a liquidity crisis, said the person, who asked not to be named discussing the confidential inquiry.

As the crisis deepened on Thursday, the securities regulator for the Bahamas, where is based, said it was freezing the firm’s assets and appointing a provisional liquidator.

Bankman-Fried has warned of bankruptcy if he can’t secure capital to cover a shortfall of as much as $8 billion. Trading may be halted in a few days on FTX US, which is a separate legal entity from

Representatives for the SEC and declined to comment.

Bankman-Fried, 30, didn’t immediately respond to a request for comment, nor did the FTX US exchange.

U.S. regulators have been looking into whether mishandled customer funds, and reviewing the global trading platform’s relationships with other Bankman-Fried’s businesses.

The SEC’s scrutiny started months ago as a probe into the FTX U.S. platform and its crypto-lending activities, but in recent days has expanded.

The initiation of probes doesn’t necessarily mean that anyone will be accused of wrongdoing.

(Image: Bloomberg)

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