Crypto: Feds said to investigate FTX’s SBF over possible crypto price manipulation, while senators want his testimony

by | Dec 7, 2022 | Stock Market

FTX founder Sam Bankman-Fried is being investigated by federal prosecutors over whether he manipulated prices of two cryptocurrencies to benefit his companies, according to a new report, and has also been ordered to testify before a Senate committee about the collapse of his crypto platform. The New York Times reported Wednesday night that Manhattan-based federal prosecutors are investigating whether Bankman-Fried steered prices of TerraUSD and Luna to benefit FTX and his Alameda hedge fund. Terra and Luna saw more than $50 billion in market value wiped out when they collapsed in May. That contributed to a wider crypto crash, and eventually the implosion of FTX.

The Times reported the probe is in its early stages, and is part of a wider investigation into FTX’s collapse and the potential misappropriation of billions of dollars of customers’ funds, which are now missing. Additionally, the Times confirmed a November Bloomberg report that FTX was also being investigated for potentially violating U.S. money-laundering laws months before FTX’s collapse. FTX, once one of the world’s largest cryptocurrency exchanges, collapsed and filed for Chapter 11 bankruptcy protection in November after running into liquidity issues. Bankman-Fried resigned as CEO, and saw his personal fortune of about $23 billion all but evaporate. About $8 billion remains missing from FTX’s balance sheet; Bankman-Fried said in a Bloomberg interview the funds were “misaccounted,” Also see: As FTX collapse spurs calls for tighter rules, ‘we’re already suited up’ on crypto, SEC chief Gensler says Separately, the Senate Banking Committee late Wednesday ordered Bankman-Fried to testify about the collapse of FTX on Dec. 14, and said it is prepared to issue a subpoena if he does not voluntarily agree to comply by the end of the day Thursday. “FTX’s collapse has caused real financial harm to consumers, and effects have spilled over into other parts of the crypto industry. The American p …

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