There are new developments in the chain of events around Binance-FTX, which has created a deep crisis in the cryptocurrency market. The US Department of Justice and regulators have contacted Binance regarding the FTX talks. Authorities want to know what Binance has learned about the inner workings of FTX.
US Department of Justice to meet with Binance for information on FTX
According to a person familiar with the situation, US authorities, including the Department of Justice, contacted crypto exchange Binance to inquire about their recent interaction with FTX as the two companies are discussing a potential bailout.
Binance said it has heard from US financial regulators in addition to regulators in Europe. He also asked for information on what Binance executives have learned about FTX’s internal workings this week. A Binance spokesperson declined to comment on the discussions. A Washington-based FTX official did not immediately respond to a request for comment.
A person familiar with the conversations said that Binance, the world’s largest global crypto platform by volume, is considering an urgent acquisition of FTX to save the firm from a liquidity crunch that measures billions of dollars. But Binance’s due diligence team quickly discovered dark conflicts with FTX’s relationship with Alameda Research, the trading firm founded by FTX CEO Sam Bankman-Fried. And according to the person, the FTX client funds appeared to have been used for business purposes.
FTX instructing employees to keep work-related documents
cryptocoin.comAs you follow on, the company’s collapse has caused concern both from industry and from the government. Senator Sherrod Brown (D-Ohio) noted on Thursday that:
It’s critical that our financial watchdogs investigate what led to FTX’s downfall. This allows us to fully understand the abuses and abuses that occur.
Also this week, FTX USA’s top attorney instructed employees to keep work-related documents. This is another sign of potential legal exposure for Bankman-Fried’s crypto empire. On Wednesday, FTX US General Counsel Ryne Miller instructed staff to withhold emails, messages, notes and documents resulting from their work at FTX, FTX US, Alameda and affiliates, sources said.
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