By Richard Hines
The CEO of FTX is expected to face prosecution for suspected embezzlement of investor funds at subsidiary, Alameda Research. According to reports, Securities Exchange Commission (SEC) head, Gary Gensler, has a close connection to a prominent executive of Alameda Research.
Investigation Into FTX Still Ongoing
Connection between the SEC chair and FTX founder was traced back to Gensler’s time as a college professor In MIT where he taught on Blockchain Technology. During this period he worked closely with Glenn Ellison, who surprisingly is the mother of Caroline Ellison, CEO of Alameda Research.
This finding occurred during the crash of the FTX exchange, which implicated the sister company, Alameda Research. Investigations of the fund transfers between these two independent but linked entities are ongoing.
FTX token (FTT), which plunged throughout this drama, has experienced a spike of almost 25% in the previous 24 hours; this is its first attempt at a resurrection following the market turmoil and filing for bankruptcy.
FTX got liquidated because it was unable to obtain the $9.4 billion compensation package; This prompted FTX CEO Sam Bankman Fried (SBF) to declare bankruptcy.
However, prosecutors have concluded that Sam might be charged with embezzlement of funds and directing these funds to Alameda Research.
However, the offshore businesses owned by Sam and FTX U.S. have prohibited U.S. law enforcement and regulatory entities from imposing strict trading regulations. However, this does not rule out the prospect of Sam being charged with misusing investor funds to support shady and risky investments.
In connection with this inquiry, authorities are also looking at all interactions the FTX exchange had with Alameda Research, from funds transactions to development, as well as other elements that might point to more proof of fraud and embezzlement.
Sam, on the other hand, stated that he was guilty of the allegations of embezzlement and that he was cooperating with prosecutors in this inquiry.
The Aim Of This Investigation
According to a prosecutor in this case, the goal of the investigation is to determine whether the SBF team intentionally misled investors to persuade them to invest their money in this exchange so that it can be transferred to the Alameda Research, or whether these claims are untrue and SBF had no such intention.
They might also charge SBF with deception when he first stated that investor funds were safe. SBF sought out Binance for assistance during the brink of liquidity, but he deleted the tweets once the deal fell through.
Prosecutors intend to use wire transfers and email correspondence as instruments in this inquiry. CZ, CEO of Binance, however, stated that he never shorted FTT and that he stopped liquidating FTT tokens after speaking with SBF.