Federal Prosecutors Had FTX on Their Radar Months Before Collapse
Federal prosecutors from Manhattan investigated for months the now-bankrupt cryptocurrency exchange FTX in connection with a 1970 law designed to prevent money laundering, but it is unclear whether the investigation concluded prior to the firm’s recent collapse amid a liquidity crisis, according to Bloomberg Monday, citing anonymous sources.
The U.S. Attorney’s Office for the Southern District of New York was particularly concerned with whether FTX was in compliance with the Bank Secrecy Act, which is designed to limit the ability of terrorists and money launderers to use the U.S. financial system, according to Bloomberg. Reports that former CEO and major Democratic donor Sam Bankman-Fried had loaned billions of dollars of customers’ assets from FTX to his other company, trading house Alameda Research, prompted prosecutors to shift the focus of their investigation, Bloomberg reported….