US authorities are asking crypto investors and trading firms that worked closely with FTX to hand over information on the company and its key figures, including founder Sam Bankman-Fried and the former head of his Alameda Research investment arm, Caroline Ellison.
The US Attorney’s Office for the Southern District of New York recently sent out a slew of requests, asking recipients to voluntarily hand over information on a list of FTX employees and associates, according to people familiar with the case.
Recipients include firms that frequently traded on FTX and may have had conversations with platform executives or hold other information that might help the criminal investigation, the people said. Such requests are often used to start tapping into potential sources of information held by witnesses, investors or customers without seeking grand jury subpoenas.
Attorneys from the US Securities and Exchange Commission’s enforcement division, which is running a parallel civil probe into the exchange-operator’s collapse, sent similar requests for information to companies that invested in or traded on the crypto platform, people familiar with those inquiries said.
The agency is seeking to learn more about relationships those companies had with the former crypto giant, as well as communications with former top brass at FTX and Alameda, including Bankman-Fried and Ellison, the people said. The SEC is also trying to get a better sense of what FTX representatives told investors and whether any misrepresentations were made that would violate securities laws, the people said.
The moves show authorities are casting a wide net as they embark on their investigations into FTX’s collapse, examining what the company and its leaders told investors and customers as the exchange imploded last month. So far, authorities haven’t accused anyone of wrongdoing.
Representatives for SDNY prosecutors and the SEC declined to comment. FTX and Sam Bankman-Fried didn’t immediately respond to requests for comment.
Galaxy Digital Chief Executive Officer Mike Novogratz, whose crypto financial-services firm disclosed a $76.8 million exposure to FTX, acknowledged in a Bloomberg Television interview Thursday that authorities have been getting in touch with firms that had interactions with FTX.
“Broadly, yes,” the prominent crypto investor said when asked if the SEC, Commodity Futures Trading Commission or Justice Department was reaching out to FTX clients such as his company. He declined to elaborate.
“Regulators have some egg on their face,” he said. “Sam was very far along at pitching to be the cash Bitcoin market here in the US, both with the SEC and CFTC.” – BLOOMBERG
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