US federal prosecutors are investigating whether FTX's founder Sam Bankman-Fried manipulated the market for two cryptocurrencies this May that led to their collapse and resulted in the implosion of his own cryptocurrency exchange, the New York Times reported on Wednesday.
The prosecutors are looking into whether
Bankman-Fried controlled the prices of two interlinked currencies, TerraUSD and
LUNA, to benefit the entities he controlled including FTX and Alameda Research,
the report said.
The investigation is in its early stages,
the newspaper said, adding that it is not clear whether prosecutors have
determined any wrongdoing by Bankman-Fried, or when they began looking at the
TerraUSD and Luna trades.
A spokesperson for the Manhattan US
Attorney's office did not respond immediately to request for comment.
Regulators around the globe, including in
the Bahamas where FTX is based and in the United States, are investigating the
role of FTX's top executives including Bankman-Fried in the firm's stunning
collapse, Reuters has previously reported
The collapsed cryptocurrency exchange
remains the subject of "an active and ongoing investigation" by
Bahamian authorities, Bahamian Attorney General Ryan Pinder said last month, as
he praised the Bahamas' regulatory regime and swiftness with which it responded
to the crisis.
The crypto exchange filed for bankruptcy
last month after a liquidity crisis that saw at least $1 billion (roughly Rs.
8,200 crore) of customer funds vanish. FTX's demise comes after a string of
meltdowns that have taken down other key players including Voyager Digital and
Celsius Network and led some global investors to question the viability of the
cryptocurrency sector.
In recent weeks, US authorities have sought
information from investors and potential investors in FTX, according to two
sources with knowledge of the requests.
Federal prosecutors in New York are asking
for details on any communications such firms have had with the crypto firm and
its executives, including Bankman-Fried, the sources said. Bloomberg previously
reported the information requests.
FTX and Alameda research did not respond to
Reuters request for comments. © Reuters