US Prosecutors And SEC Step Up Information Collection On Key Persons In FTX Fallout

US prosecutors and the SEC are creating an extensive network to gather complete information about the collapse of FTX and its key players.

According to Bloomberg, citing people familiar with the matter, the U.S. Attorney’s Office in the Southern District of New York recently sent out a series of letters of inquiry to crypto investors and commercial firms cooperate closely with FTX.

It requires recipients to voluntarily hand over FTX information on a list of employees and partners, including SBF, founder of FTX, and Caroline Ellison, former head of investment at Alameda Research.

Additionally, attorneys from the SEC’s Enforcement Division, which is conducting a parallel civil investigation into the exchange operator’s collapse, has issued similar information requests to companies that invest or trade on cryptocurrency platforms, the SEC is also trying to understand what FTX representatives have told investors and whether there is a Misrepresentation violates securities laws or not.

The companies that received the information included companies that regularly use FTX for transactions that may have spoken to platform executives or hold other information that could aid criminal investigations, the source said.

Such requests are often used to initiate exploitation of potential sources of information held by witnesses, investors or clients without requiring a grand jury subpoena.

The report said the moves show that authorities are expanding their network as they embark on an investigation into the collapse of FTX, consider what the company and its leaders told investors and customers when the exchange collapsed last month. So far, the authorities have not charged anyone with wrongdoing.

As updated in an earlier Coincu News article, yesterday, owner and former CEO of FTX, Sam Bankman-Fried participated in an interview with News York Magazine. Sam acknowledged major deficiencies in monitoring, accounting and risk control.

In addition, he acknowledged two main reasons for Alameda’s downfall, the first being that an Alameda margin position grew too large and was liquidated. And the second is due to the “stub accounts” left over from when FTX was unable to set up a bank account and Alameda’s wallet was used for deposits and withdrawals.

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