Sam Bankman-Fried. Source: a video screenshot, HBO / YouTubeFTX's collapse is already drawing the attention of US regulators, who are now investigating whether the company mismanaged client funds. The investigation begins when members of the community begin to wonder where CEO Sam Bankman-Fried is.
Citing two people "familiar with the matter," a new Bloomberg report says regulators are already requesting details about the ownership structure of FTX's US subsidiary, FTX US, and international trading platform FTX.com.
Regulators would be interested in any overlap in management or board members between the two companies, which FTX has described as two distinct and separate entities.
According to Bloomberg sources, regulators have requested details about how the two entities handled customer accounts under the FTX brand and whether user accounts were properly segregated. Notably, this adds to a closer look at FTX's ties to Bankman-Fried's now-famous trading firm, Alameda Research.
Meanwhile, the exact whereabouts of Sam Bankman-Fried remain unclear, although it has been reported that he resides in the Bahamas, where FTX's world headquarters are located. However, just days before FTX stopped processing client withdrawal requests, the exchange's official Twitter account posted a now-deleted video showing the view from the company's new office in Miami, Florida.
In other words, it is unclear at this time if Bankman-Fried is currently in Florida, the Bahamas, or elsewhere.
Regulators have repeatedly warned against crypto companies
The investigation into FTX transactions would be handled by the Securities and Exchange Commission (SEC) and the derivatives-focused Commodity Futures Trading Commission (CFTC).
In the past, SEC Chairman Gary Gensler has warned about the risks of cryptocurrencies and, in particular, the risks associated with cryptocurrency exchanges. He also indicated that some exchanges may violate securities laws by offering tokens considered unregistered securities to US retail clients.
Perhaps Gensler's strongest warning to date came during a hearing before the US Senate Committee on Banking, Housing, and Urban Affairs, where Gensler used strong words to attack the housing industry's crypto:
“Frankly, at the time, more like the Wild West or the old “buyer wary” world that existed before securities laws were enacted. This asset class is rife with fraud, scams, and abuse in certain applications. »