US prosecutors are laying the groundwork for a possible fraud case against Sam Bankman-Fried and others involved in the demise of crypto exchange FTX, reports Bloomberg News Agency. The prosecutor’s office is investigating how funds of the stock exchange operator were moved outside the US when it was heading for bankruptcy according to an anonymous source known to the agency.
US investigates whether FTX founder Sam Bankman-Fried committed fraud
Prosecutors are investigating whether hundreds of millions of dollars were improperly sent to the Bahamas around the time FTX filed for bankruptcy in the state of Delaware on november 11, the person said. The source asked Bloomberg not to be named without permission.
The officials also met with FTX’s court-appointed regulators this week to discuss the material they plan to collect, the person said.
They are also investigating whether FTX broke the law by transferring funds to Alameda Research. That is the bankrupt investment company that was also founded by Bankman-Fried.
Banker-Fried, who is in the Bahamas and has so far not been charged with any crime, has admitted to making serious management mistakes at FTX. So far, he steadfastly denies that he ever deliberately misused money from customers.
A spokesman for Bankman-Fried declined to comment on Friday, according to Bloomberg. The New York Times reported this week that federal prosecutors are also investigating whether banker-Fried was involved in market manipulation by orchestrating transactions that led to the collapse of the TerraUSD ecosystem earlier this year.