U.S. securities and commodities regulators are probing whether FTX.com correctly managed client funds, despite statements this week by the ailing crypto exchange’s CEO, Sam Bankman-Fried, that all customer holdings were covered, according to sources cited by Bloomberg Wednesday.
The inquiries by the Securities and Exchange Commission and Commodity Futures Trading Commission date back several months and started as a probe into the crypto lending activities of FTX's U.S. counterpart, FTX US. But the investigations are related to the issues that have caused FTX's current liquidity crisis and look at the relationship between FTX.com, its trading house Alameda Research and FTX US, according to Bloomberg's report.
On Tuesday, rival exchange BINANCE said it was planning to buy the non-U.S. business of FTX, citing a “severe liquidity crunch,” but there are now indications a review of FTX’s books has led to a change of heart on Binance's part.
tweet posted Monday and subsequently deleted, Bankman-Fried said his company “has enough to cover all client holdings.”
“We don’t invest client assets,” he said, in an apparent bid to stave off a bank run. “FTX is fine. Assets are fine.”
Last week, CoinDesk revealed that Alameda and FTX were more closely linked than had been thought, with much of Alameda’s balance sheet assets in the form of FTX’s token, FTT.
