US SEC has launched an investigation into the financial firms & investors that funded FTX.
US authorities also requested documents from FTX investors to learn more about their interactions with company executives.
Also, US authorities are looking into former FTX engineering director Nishad Singh.
The SEC has already charged FTX's former CEO, Sam Bnakman-Fried. SBF was arrested in the Bahamas and later extradited to the United States. Last Tuesday, he pleaded not guilty in court. On contrary, FTX's former Chief Technology Officer Gary Wang, and former Chief Executive of Alameda research, Caroline Wilson, have pleaded guilty.
The SEC is currently inquiring into the financial firm's due diligence policies and protocols. Also, if they followed them while investing in the collapsed cryptocurrency exchange FTX. However, these investigations do not reveal if these financial institutions committed any misconduct.
Nonetheless, as per the report, these firms may suffer regulatory consequences despite having fallen for SBF's alleged scheme. The question here is whether they followed the company's and investors' due diligence policies.
Reports highlighted that US authorities requested documents from FTX investors and potential investors in order to learn more about their interactions with company executives. Since 2019, FTX has raised 1.9 billion USD from stock investors before filing bankruptcy.
These inquiries were made before the SEC charged FTX founder Sam Bankman-Fried with defrauding these investors last month. Reports noted that the SEC continued to question investors after filing those claims, but it has subsequently shifted its focus to the firms' due diligence.
As per recent reports, the US SEC, the CFTC, and authorities are looking into former FTX engineering director Nishad Singh for his possible role in defrauding investors and users. It's unclear what role Singh may have played in the alleged criminal conduct and regulatory violations at FTX Group.
Nishad Singh reportedly participated in the 'wirefraud' chat group alongside Ellison, Bankman-Fried, and Wang. In the chat group, they allegedly discussed the unlawful financial relationships between FTX and Alameda. During his time at FTX, Singh lived in the Bahamas with other FTX employees.
Bankman-Fried's case is still underway, with his criminal trial set to begin on October 2. The United States Attorney's Office for the Southern District of New York announced the formation of the FTX Task Force on January 4 to track and recover lost user funds as well as investigate matters relating to the exchange's collapse.
What do you think? Is Nishad Singh also responsible for the FTX's downfall? Do you believe the SEC's ongoing investigations will make any changes in the FTX meltdown case? Please share your valuable thoughts in the comment section below.
Also read: ADA Resists Broader Market Correction With Cardano Whale Accumulation
