The Department of Justice and Securities and Exchange Commission are investigating FTX , a crypto political platform that halt withdrawals on Tuesday , according to a new write up from the Wall Street Journal . And while the SEC ’s investigation has reportedly been go “ for months , ” the agency ’s examination has only expanded this workweek following the liquidity crisis at FTX , which has do the intact cryptocurrency market to tank .
The investigations by the SEC concern FTX ’s U.S. interchange , FTX.us , and the coins list there , agree to theWall Street Journal . The SEC is also looking into whether FTX lending production might be considered security , which would require the company to record them with the SEC .
The argument over whether crypto tokens are securities or currency has been raging for years , with crypto advocates endeavor to argue that crypto like Bitcoin is a currency . If crypto is indeed a currentness , that means investors would n’t face serious tax implications , just as the great unwashed typically are n’t taxed for holding U.S. dollars . But if they ’re security , as the head of the SEC , Gary Gensler , has previously argued , then Bitcoin can be regulated like portion you might buy on a stock exchange , sodding with the tax entailment of any other protection .
A screenshot from the FTX ad featuring comedian Larry David that ran during the Super Bowl in February 2022.Screenshot: FTX / YouTube
It ’s not clear whether DOJ ’s investigation has been in the kit and caboodle for some time , though investigators are reportedly in contact with the SEC , according to the Wall Street Journal . It ’s also not clear if FTX ’s baby organisation Alameda Research is part of any possible criminal investigation . Alameda Research was being shore up up with at least $ 4 billion in FTX fund , accord to a new report fromReuters , after Alameda made some bad bets on things like crypto lender Voyager Digital , which recently declared failure . The Justice Department did not respond to a asking for gossip early Thursday .
The CEO of FTX and Alameda , Sam Bankman - Fried , has n’t been seen in a couple of days , with social media rumor swirling about where he may be blot out out — the Bahamas is a popular hearsay on Twitter , though there ’s no grounds to hint he ’s actually take flight the continental U.S. But after Binance made a brief motion to potentiallybuy the company , only to back out after seeing the Bible , it ’s no surprise that SBF , as he ’s often call , may require to lay low for a while .
FTX has reportedly been assay to get a bailout from Wall Street firms to the tune of about $ 1 billion , though it has come up empty handed thus far . Most of FTX ’s legal and compliance teams seemingly quit on Tuesday , according to word outletSemafor , which is certainly raising interrogative sentence about whether FTX will ever be able to get on its feet again .
The drinking straw that obviously broke the camel ’s back at FTX was a decision by Binance CEO Changpeng Zhao , also known as CZ , to sell a Brobdingnagian hoard of FTX ’s native token , FTT . Zhao bought a 20 % stake in FTX back in 2019 but Zhao and Bankman - Fried had a falling out in mid-2021 when FTX was adjudicate to get a financial permit to mesh in Gibraltar , according toReuters . Regulators had postulate for fiscal information from major shareholders , including Zhao , but the Binance CEO ostensibly did n’t want to hand over the document .
As a result of Zhao ’s stonewalling , Bankman - Fried buy out Zhao for about $ 2 billion which included a flock of FTT token , according to Reuters . Zhao ’s decision to bulge selling about $ 580 million of the coin this week , which he announced publicly on Twitter , is when shit hit the lover for FTX .
News of the investigations at DOJ and SEC come as the entire cryptocurrency food market has plummeted , weighed down by general skepticism of digital simulated money and now the troubles at FTX . It was just this retiring February when FTX was running adsduring the Super Bowlfeaturing a humorously sceptical Larry David . The ads sought to portray crypto sceptic as unnecessarily cautious about the industry , break to see the genius of investing in coin like Bitcoin and Ethereum . In retrospect , Larry David ’s character reference was the smart one .
https://www.youtube.com/watch?v=BH5-rSxilxo
Bitcoin is currently deal at more or less $ 16,580 , down 8 % from just 24 hours ago and a two - twelvemonth first gear for the cryptocurrency . Bitcoin ’s all - time - high was exactly a year ago , when it was trading at over $ 69,000 . Ethereum , the second most pop cryptocurrency , is currently is merchandise at $ 1,180 , down about 7 % from a 24-hour interval earlier .
FTT , the aboriginal token at FTX , is presently trading at just $ 2.95 , down 33 % from 24 hours ago and down 88 % from a week ago . FTT was trading at $ 60.16 a year ago today .
Several other cryptocurrency platforms and coin have imploded in the past yr , including Celsius , which halt withdrawalsin Junebefore filing for failure and reportedly owe users $ 4 billion . Luna , the cryptocurrency begin by Do Kwon , became worthlessback in May . Freeway , a UK - based crypto political program that promised return ashigh as 43 % , also go off just last calendar month .
What ’s next for FTX and will people who put their money into the platform ever see their coin again ? unluckily nobody have it off the resolution to those questions yet . But every Clarence Shepard Day Jr. that go by without a monumental bailout of the company is a big sign .
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