FTX WRONGly Use Consumer Funds And Market Manipulation, Manhattan Federal Prosecutors Intersection

US authorities are investigating FTX. (Photo; Doc. Crypto Tendencia)

JAKARTA More than three weeks since the bankruptcy of the FTX crypto exchange, no one has been authorized to arrest FTX officials. Until now, FTX consumers who invest their funds in the crypto exchange have not received certainty about the losses they have suffered.

However, John Ray as the new FTX CEO who replaced Sam Bankman-Fried (SBF) is reported to have met with federal Manhattan prosecutors in the FTX bankruptcy investigation. Manhattan authorities are investigating allegations of misuse of consumer funds by the crypto exchange.

On the other hand, the US Securities and Exchange Commission (SEC) led by Gary Gensler is also reportedly investigating FTX. John Ray's meeting with Manhattan federal prosecutors took place in New York on Thursday, December 8 yesterday.

Prosecutors are looking into whether FTX misuses customer funds for trading. This is despite other allegations that FTX founder Sam Bankman-Fried was the cause behind the collapse of TerraUSD (UST) in early 2022.

The New York Times report reveals federal investigations are focused on whether FTX is manipulating the market for two crypto tokens belonging to Teraform Labs, TerraUSD and LUNA. SBF faces a broader investigation into the potential for market manipulation, the report added.

Previously, the report reported the founder of Terra, Do Kwon, who blamed Sam Bankman-Fried and Genesis for the Terra crisis. Kwon said he believed Genesis provided a $1 billion stablecoin TerraUSD (UST) to SBF before UST's depeg. For information, depeg is a process of releasing stablecoin value from its benchmark, which is the value of fiat money.

In recent weeks, federal prosecutors have sought to gather information from investors linked to FTX, the report quoted sources as saying. Authorities are looking for details of communications made with anyone from crypto exchanges.

This could be an attempt to gather documentary evidence about Sam Bankman-Fried's involvement. At the same time, legal expert John Deaton believes it is only a matter of time before prosecutors find enough evidence to apprehend the SBF.

XRP attorney John Deaton recently said that there is a lot of evidence already out there to imprison SBF. He added that the violations committed by crypto exchanges were the same as theft, reported by Coingape.