Cryptocurrency exchange FTX attracted the attention of US prosecutors a few months before the collapse

The U.S. Attorney’s Office of the Southern District of New York became interested in FTX several months before the cryptocurrency exchange filed for bankruptcy. Bloomberg reports. The investigation focused on cryptocurrency platforms that have branches both in the US and abroad — including Sam Bankman-Fried's Bahamian firm, which also operated FTX US. The prosecutors' focus was on compliance with the Bank Secrecy Act, which requires cryptocurrency exchanges to take measures to prevent money laundering and terrorist financing.

The US regulators are now seeking information for the investigation from the new FTX CEO John Ray III, who has been sharply criticizing the activities of his predecessor. Already during the first court hearings on the case of the bankrupt cryptocurrency exchange, the current FTX CEO explained that the «unprecedented situation» faced by the crypto community is the fault of Sam Bankman-Fried and his team — «a small group of inexperienced and potentially compromised individuals.» According to the preliminary findings, the company lacked the basis for implementing controls over accounting, auditing, cash management, cybersecurity, professional staff, data protection risks, and other business-critical systems.

As a reminder, the US and Bahamian authorities are considering extraditing Sam Bankman-Fried from the Bahamas to the US. The criminal article under which Freed may be charged includes fraud with the use of electronic communications. If the DOJ brings criminal charges, the agency will be forced to issue an arrest warrant for all FTX top executives involved in any illegal actions. Mr. Benkman-Fried himself risks going to jail for 20 years.