According to a court filing dated Thursday, the US Department of Justice seeks an independent investigation into the collapse of crypto exchange FTX.
The walls appear to be closing in around FTX’s CEO. On November 9, the United States Department of Justice issued an investigation into the exchange, due to the sudden catastrophic collapse, all while FTX was already under investigation by state and federal authorities.
Now, the DOJ requested a bankruptcy court to examine potential crimes that may have been committed during the company’s meltdown.
The DOJ’s Trustee Andrew R. Vara stated in the filing that the examiner must “investigate the substantial and serious allegations of fraud, dishonesty, incompetence, misconduct, and mismanagement by the Debtors,”.
More Than Enough For An SBF Investigation
There is more than enough room to investigate if FTX Alameda executives committed financial crimes. Allegations state that FTX mismanaged customer funds in order to cover the losses of its sister company, Alameda Research.
After assuming the post left by SBF, the exchange’s new CEO John Ray III (who is a longtime expert in handling companies undergoing bankruptcies), claimed that FTX’s case was “a complete failure of corporate controls,” while implying that this was the worst case he has ever had to work with.
The Attorney’s Office for the Southern District of New York sent information requests to investors and businesses connected to FTX.
For the time being, however, the DOJ prefers to keep the procedures in the “examination period”. The American department intends on keeping the information collected private before moving on to a full-on investigation.
Sam Not Worried About Prison
To put it simply, Sam Bankman-Fried is doing everything a person on the verge of federal investigation should not be doing.
This week, SBF appeared publicly in several venues. He used these appearances to apologize for the billions of customer funds lost and answer sensitive questions about the collapse.
However, when asked if he fears facing prison time, SBF claims that he does not worry about it. For the time being the focus now is to provide an explanation to the public.
However, his legal team is extremely displeased with his several public appearances since the company went down.
“What SBF is doing is a form of litigation suicide,” Howard Fischer, a former SEC lawyer told Alisson Morrow at CNN. “Everything he says that turns out to be contradicted by admissible evidence will be taken as evidence of deceit.”
Perhaps, SBF cannot live without the spotlight. During his time as head of the seventh largest cryptocurrency exchange, Bankman-Fried endorsed public imagery of a philanthropist genius billionaire. In April, SBF appeared in a Bloomberg article claiming that he wanted to give away his entire fortune in the future… turns out he did.
