FTX Founder Sam Bankman-Fried Illegally Moved Millions During Bankruptcy

U.S. federal prosecutors investigating the collapse of crypto exchange FTX and its relation with hedge fund Alameda Research are now probing how funds held by the crypto exchange moved out of the U.S. while filing for Chapter 11 bankruptcy. Meanwhile, former FTX CEO Sam Bankman-Fried agrees to testify before the U.S. House Financial Services Committee, but with some conditions.

Prosecutors Probe SBF For Fund Transfers During Bankruptcy

Prosecutors looking for a fraud case against Sam Bankman-Fried and others involved in the collapse of cryptocurrency giant FTX. Transactions have revealed that funds held by FTX moved outside the U.S. while the firm was filing bankruptcy, reported Bloomberg on December 10.

Prosecutors are investigating whether SBF, FTX, or any related parties illegally transferred millions of dollars to the Bahamas during the bankruptcy filing in Delaware on November 11.

The U.S. Dept. of Justice (DOJ) is investigating how FTX handled its customers’ cash and assets. The DOJ officials met with court-appointed overseers to collect evidence materials related to the FTX probe. The investigation team is also looking into transactions between FTX and Alameda. SBF says he wasn’t involved with Alameda or denies knowingly misappropriating customer funds. However, transactions revealed Alameda and FTX operations were commingled with each other.

The meeting was held between officials from federal attorneys, Justice Department, the FBI, and the bankruptcy team led by new FTX CEO John J. Ray III, and FTX lawyers. It also included former Securities and Exchange Commission enforcement director Steve Peikin and former Manhattan federal prosecutor Nicole Friedlander.

Prosecutors are also investigating whether Sam Bankman-Fried with its hedge fund Alameda was engaged in market manipulation that led to the Terra-LUNA crisis.

Meanwhile, SBF on Friday agreed to testify before the U.S. House Financial Services Committee on December 13 and Senate Banking Committee on December 14. Former trial attorney CFTC Braden Perry believes SBF could be taken into custody if he enters the U.S.

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