One of the world’s largest cryptocurrency exchanges, the famous, or infamous FTX Trading Ltd (FTX) filed for bankruptcy in 2022. Shortly thereafter, U.S. regulators, in particular the U.S. Securities and Exchange Commission (SEC) as well as the Commodity Futures Trading Commission (CFTC) brought to light their investigations of FTX’s relationship with its sister entity Alameda Research, the FTX US platform, and its crypto-lending activities, liquidity issues, and mishandled customer funds. A month after FTX filed for bankruptcy, the SEC released new guidance on December 8, 2022, requiring companies that issue securities to disclose to investors their exposure and risk to the cryptocurrency market. Under the new guidance, companies will have to include crypto asset holdings as well as their risk exposure to the FTX bankruptcy and other market developments in their public filings. The Securities and Exchange Commission (SEC) charged Samuel Bankman-Fried with orchestrating a scheme to defraud equity investors in FTX Trading Ltd. (FTX), the crypto trading platform of which he was the CEO and Co-founder. Investigations as to other securities law violations and into other entities and persons relating to the alleged misconduct are ongoing. According to the SEC’s complaint, since at least May 2019, FTX, based in The Bahamas, raised more than $1.8 billion from equity investors, including approximately $1.1 billion from approximately 90 U.S.- based investors.
Full commentary on Increased Cryptocurrency Enforcement in the United States.
