Bahamian law-enforcement officials are taking a closer look at the collapse of crypto giant FTX, reportedly probing if any “criminal misconduct occurred” amid a massive exchange of funds and a $6-billion dollar withdrawal that led to the platform’s bankruptcy in a matter of hours.
“In light of the collapse of FTX globally and the provisional liquidation of FTX Digital Markets Ltd., a team of financial investigators from the Financial Crimes Investigation Branch are working closely with the Bahamas Securities Commission to investigate if any criminal misconduct occurred,” the Royal Bahamas Police said in a statement.
The investigation adds to a U.S. probe by the Justice Department and the Securities and Exchange Commission examining the policies and behaviors of the platform and Sam Bankman-Fried, its CEO and founder.
Once a poster boy for the emerging virtual market, Bankman-Fried resigned from FTX on Friday while the platform filed for Chapter 11 bankruptcy and amid a whirlwind of accusations—including that FTX had lost somewhere between $1 and $2 billion in client funds, and that the wunderkind had transferred $10 billion in customer assets from FTX to another one of his companies, Alameda Research.
According to text messages exchanged with Reuters, Bankman-Fried “disagreed with the characterization” of the transfer to Alameda, claiming they didn’t “secretly transfer.”
Instead, the ousted CEO claimed that they had “confusing internal labeling and misread it” and responded “???” to a question about the missing $1 billion in client funds.
The group’s new chief executive, John J. Ray III, said in a statement on Saturday that FTX was working with law enforcement and was “making every effort to secure all assets, wherever located.”