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Regulators All Over The World Investigate FTX Collapse

 |  November 14, 2022

 FTX filed for US bankruptcy proceedings on Friday, capping a week of turmoil for one of the world’s largest cryptocurrency exchanges. Now regulators all over the world are jumping into action.

The Bahamas’ securities regulator has frozen some FTX assets, and appointed a provisional liquidator to assess whether the exchange’s Bahamian operations — the company is headquartered there — should be wound down. The regulator said it was driven by reports that FTX client money was improperly used to prop up a trading affiliate, Alameda Research. That comes as regulators like the S.E.C. and the Justice Department are also investigating, and as FTX operations in Australia and Japan were shut or suspended.

“A team of financial investigators from the Financial Crimes Investigation Branch are working closely with the Bahamas Securities Commission to investigate if any criminal misconduct occurred,” the police said in a statement.

Meanwhile in the US, the California DFPI announced it will open up an investigation as to the “apparent failure” of FTX and says it takes this oversight very seriously.

The Department of Financial Protection and Innovation (DFPI) in the state of California announced on Nov. 10 that it will open up an investigation as to the “apparent failure” of the cryptocurrency exchange FTX.

Related: FTX Searching For $9.4 Billion Investment To Avoid Bankruptcy

California regulators said in the announcement that the DFPI takes this oversight responsibility “very seriously” and that the department expects all entities offering financial services in the state to comply with local financial laws.

In Europe, Cyprus’s Securities and Exchange Commission asked FTX EU to suspend its operations on Nov. 9, the regulator said on Friday. 
FTX announced in September it had received approval from the Cypriot regulator to operate as a Cyprus Investment Firm, allowing the company to fully own a local investment firm it had previously acquired.

In Japan, FTX tweeted on Thursday that its local Japanese unit would go into “close only” mode, following the guidance of Japan’s Financial Services Agency, preventing customers from opening new accounts or trading.