FTX reports mysterious cash outflows reportedly totaling nearly half a billion dollars. Now the authorities are investigating.
Following the bankruptcy filing of crypto exchange FTX, the Bahamas police have launched an investigation. In light of FTX’s global collapse, a team of financial investigators, working closely with the island nation’s securities regulator, is looking into whether there was criminal wrongdoing, police said Sunday. The Bahamas is home to FTX’s international operations as well as resigned chief executive Sam Bankman-Fried. The securities regulator had previously stated that the company was suspected of misappropriating customer funds, among other things.
Bankman-Fried’s international crypto platform FTX.com ran into payment difficulties a week ago after doubts about its capital reserves led to a customer exodus and funds withdrawals worth billions of dollars. On Wednesday, it initially looked as if rival Binance would take over the bulk of the struggling group. But this plan failed the following day, Binance called off the acquisition of its stumbling rival.
Assets frozen, FTX insolvent
On Thursday, the Bahamas Securities Commission said it had frozen certain assets of FTX and requested a receiver for its liquidation. On Friday, FTX filed for creditor protection in the U.S., and Bankman-Fried announced his resignation as chief executive. The legal counsel for FTX’s U.S. subsidiary, Ryne Miller, said on Twitter on Saturday that there had been “unauthorized transactions.” After the mysterious money outflows, all digital assets are stored offline as a precaution. Miller did not disclose the volume of affected transactions or the alleged originators.