FTX Fraud Investigation Could “Exhaust Resources” of Southern District According to Prosecutors
Watcher GuruJan 09, 2023
At a Delaware bankruptcy court on Wednesday, lawyers for crypto exchange FTX said the company has recovered $5B worth of liquid assets. None of this amount reportedly includes any illiquid cryptocurrency assets.
The uncovered assets — allegedly including cash, liquid digital assets, and investment securities — comes as FTX under new CEO John J. Ray III is trying to recover as many customer and investor assets as possible following the company's collapse under the previous CEO and founder Sam Bankman-Fried.
The entire FTX saga has shown the corrupt and volatile nature of Sam Bankman-Fried, the crypto industry at large, and its regulators. As the company scrambles to find assets for paybacks, the crypto market is tanking. Entities like the federal Southern District of New York are probing how wide-ranging potential offenses are — with bribery, fraud, and campaign finance violations all in play.
Despite the myriad problems exposed by the FTX fiasco, cryptocurrency can't be counted out as a viable investment. With wages slowing and the service sector contracting in the US, it's possible that the Fed will ease up on interest rate hikes — something very positive for the crypto market. A market rebound may be on the way.