Authorities in the Bahamas are looking into the FTX collapse to see if any illegal activity took place, according to a statement from the Royal Bahamas Police on Sunday.
One of the most high-profile cryptocurrency meltdowns, FTX filed for bankruptcy on Friday after traders rushed to remove $6 billion off the platform in only 72 hours and competitor exchange Binance ditched a proposed rescue package.
The Royal Bahamas Police said in a statement on Sunday that a team of financial investigators from the Financial Crimes Investigation Branch are collaborating closely with the Bahamas Securities Commission to determine whether any criminal misconduct occurred in light of the collapse of FTX globally and the provisional liquidation of FTX Digital Markets Ltd.
A request for confirmation from FTX was not instantly complied with.
John J. Ray III, the newly appointed CEO of FTX, stated on Saturday that the organisation was working with law authorities and regulators to address the issue and was making every attempt to safeguard any assets, wherever they may be.
As a result of the exchange’s quick fall from glory, Sam Bankman-Fried, the 30-year-old entrepreneur who is well known for donning shorts and a T-shirt, went from being the face of the cryptocurrency industry’s successes to the major character of the sector’s most catastrophic crash.
Bankman-Fried, who resides in the Bahamas, has also come under scrutiny for his travels. On Twitter, he shot down rumours that he had been to South America. He texted, “Nope,” when questioned on Saturday if he had taken a flight to Argentina. Was in the Bahamas, he claimed.
At least $1 billion in customer cash have disappeared from the platform due to the upheaval at FTX, sources told on Friday. According to the sources, Bankman-Fried had transferred $10 billion in consumer cash to his trading firm, Alameda Research.
When FTX’s U.S. chief counsel Ryne Miller tweeted on Saturday that the company’s digital assets were being placed into so-called cold storage to minimise harm after seeing illicit transactions, new issues emerged.
To protect against hackers, cold storage refers to cryptocurrency wallets that are not linked to the internet.
FTX International & FTX United States have lost $659 million in the previous 24 hours, according to blockchain analytics company Nansen.
FTX Trading stated in its bankruptcy filings that the firm has assets and equity worth about $10 billion and $50 billion, liabilities around $10 billion and $50 billion, and above 100,000 creditors. As CEO, Ray, a restructuring specialist, was chosen.
According to a report, Bankman-Fried provided with investors a paper on Thursday that said FTX had $14.6 billion in assets and $13.86 billion in liabilities. Only $900 million of those resources, however, were liquid, creating a liquidity shortage that resulted in the company declaring bankruptcy.
Investors were surprised by the drop, which renewed calls for regulation of the crypto-asset industry, which has suffered losses all year due to the decline in bitcoin prices.
After Binance withdrew its rescue deal for FTX on Wednesday, Bitcoin went below $16,000 for the first time since 2020.
Its price on Saturday was about $16,5600, a significant drop from its record high of $69,000 BTC=BTSP in November of last year.
In summary: Changpeng Zhao, the chief executive of cryptocurrency exchange Binance, announced on Sunday that the company no longer accepts transfers of FTX’s FTT token on its platform and urged other rival exchanges to follow suit.
The crypto exchange FTX, which declared bankruptcy on Friday, stated it had discovered the unauthorized access on Saturday. Analysts also claimed that hundreds of millions of dollars worth of assets had been removed from the network in “strange circumstances.”
To avoid the possibility of suspicious extra supplies having an impact on the market, Binance has halted accepting FTT deposits. CEO Zhao stated in a tweet that the team will keep an eye on the situation.
