By Richard Hines
Similar to the case of Do Kwon during the Luna crash, the recent occurrence of FTX liquidation has piqued the interest of the US regulatory services SEC, who are looking into FTX’s finances. The SEC is investigating the FTX firm to learn more about the situation with user funds.
SEC Begins Investigation
After the FTX exchange’s recent loss of victory, the SEC has seen this as a call to duty to shine their torchlight on this exchange. The SEC is conducting an investigation to determine its relationship with its sister company FTX.US.
Bloomberg issued this report informing the public of the ongoing intensive investigation to determine what caused the token crisis and liquidation, as well as to ensure the safety of user funds. However, SEC is more concerned with the funds deposited by investors in the firm. Their investigation into FTX.US did not provide more detailed results because some sources refused to discuss the findings.
Yesterday’s news included Binance preparing to buy the FTX exchange. This news caused a huge uproar in the community, causing the FTT token to drop by 80%, while the BNB token rose from $335 to $383 in 15 minutes. The market’s liquidity and volatility did not spare the Solana token, which fell to $17.
But it’s not clear whether his deal will go through or if this was simply mastermind CZ’s plan to put an end to the competition exchange, FTX.
The Accumulation Of Issues
Before it got this bad, the FTX exchange had been having problems of shady businesses: siding with regulatory bodies to impose regulations on cryptocurrencies (which CZ did not like and moved to sell off all of his holdings of FTT tokens), and allegations of breaching a contract with Bybit over a three-year timeframe to hold tokens.
All of these things simply appeared to have accumulated, waiting for the right moment to break open. Yesterday was that moment, as Sam Bankman-Fried was no longer able to shield this exchange from what lay ahead as his exchange was hurt by the liquidation.
The Do Kwon case, which Kwon was charged with embezzlement following the Luna Crash, is often compared to this one, but it is unclear what the SEC will do after the investigation. However, it’s crucial to remember that this inquiry will last for some time and probe deeply to unearth facts relating to user’s funds.