U.S. prosecutors are probing into whether FTX founder and former CEO Sam Bankman-Fried could have manipulated the prices of TerraUSD and Luna cryptocurrencies earlier this year to benefit his businesses, the New York Times reported.
The prosecutors are looking into whether Bankman-Fried could have “steered” the prices of algorithmic stablecoin TerraUSD (UST) and its associated token Luna (LUNA), the report said, citing two people familiar with the matter.
Those two cryptocurrencies collapsed in May, about six months before Bankman-Fried’s crypto exchange FTX and more than 100 related entities filed for Chapter 11 bankruptcy protection. One of those entities was FTX’s sister trading firm Alameda Research, which was forced to wind down trading and is now the subject of scrutiny after The Wall Street Journal and Reuters reported that FTX had lent the firm billions in client funds.
The investigation into Bankman-Fried’s TerraUSD and Luna trading activity is still young, The New York Times reported, noting that it is “not clear whether prosecutors have determined any wrongdoing” by SBF or when investigators started looking into his company’s TerraUSD and Luna trades.
The report cites a statement from Bankman-Fried saying he was “not aware of any market manipulation and certainly never intended to engage in market manipulation.”
The probe into whether Bankman-Fried could have manipulated these cryptocurrency markets is just one aspect of ongoing investigations targeted toward his web of companies by authorities in the U.S. and beyond. The Wall Street Journal revealed that the The Department of Justice (DOJ) and the Securities and Exchange Commission (SEC) are also examining FTX in the days ahead of its collapse, and Bloomberg reported that federal prosecutors were looking into the firm months before it filed for bankruptcy. Authorities in The Bahamas are also investigating the FTX Digital Markets subsidiary that was headquartered there.
Meanwhile, U.S. lawmakers also want Bankman-Fried to testify about how the bankruptcy of his companies unfolded before the year’s end. The U.S. Senate Banking Committee on Wednesday asked Bankman-Fried to present himself on Dec. 14. Meanwhile, senior members of the House Financial Services Committee are considering issuing a subpoena that would require him to testify.
© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
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