<p>Federal prosecutors are investigating whether FTX’s founder, Sam Bankman-Fried, manipulated the market for two cryptocurrencies this past spring, leading to their collapse and creating a domino effect that eventually caused the implosion of his own cryptocurrency exchange last month, according to two people with knowledge of the matter.</p>.<p>US prosecutors in New York are examining the possibility that Bankman-Fried steered the prices of two interlinked currencies, TerraUSD and Luna, to benefit the entities he controlled, including FTX and Alameda Research, a hedge fund he co-founded and owned, the people said.</p>.<p><strong>Also Read: <a href="https://www.deccanherald.com/business/business-news/ecb-says-bitcoin-is-artificially-propped-up-shouldnt-be-legitimised-1167170.html" target="_blank">ECB says Bitcoin is artificially propped up, shouldn't be legitimised</a></strong></p>.<p>The investigation is in its early stages, and it is not clear whether prosecutors have determined any wrongdoing by Bankman-Fried, or when they began looking at the TerraUSD and Luna trades. The matter is part of a broadening inquiry into the collapse of Bankman-Fried’s Bahamas-based cryptocurrency empire, and the potential misappropriation of billions of dollars in customer funds.</p>.<p>Federal prosecutors and the Securities and Exchange Commission have been examining whether FTX broke the law by transferring its customer funds to Alameda. Last month, a run on deposits exposed an $8 billion hole in the exchange’s accounts, causing the company to collapse. Bankman-Fried stepped down as FTX’s chief executive when the company filed for bankruptcy on Nov. 11.</p>.<p>FTX is also under investigation for violating US money-laundering laws that require money transfer businesses to know who their customers are and flag any potentially illegal activity to law enforcement authorities, three people familiar with the investigation said.</p>.<p>In a statement, Bankman-Fried said he was “not aware of any market manipulation and certainly never intended to engage in market manipulation.”</p>.<p>“To the best of my knowledge, all transactions were for investment or for hedging,” he added.</p>.<p>Representatives of the US Attorney’s Office for the Southern District of New York in Manhattan declined to comment. Representatives of FTX did not immediately respond to requests for comment.</p>.<p>The focus on possible market manipulation adds to the legal storm brewing around Bankman-Fried. It is illegal for an individual to knowingly stage market activity designed to move the price of an asset up or down.</p>
<p>Federal prosecutors are investigating whether FTX’s founder, Sam Bankman-Fried, manipulated the market for two cryptocurrencies this past spring, leading to their collapse and creating a domino effect that eventually caused the implosion of his own cryptocurrency exchange last month, according to two people with knowledge of the matter.</p>.<p>US prosecutors in New York are examining the possibility that Bankman-Fried steered the prices of two interlinked currencies, TerraUSD and Luna, to benefit the entities he controlled, including FTX and Alameda Research, a hedge fund he co-founded and owned, the people said.</p>.<p><strong>Also Read: <a href="https://www.deccanherald.com/business/business-news/ecb-says-bitcoin-is-artificially-propped-up-shouldnt-be-legitimised-1167170.html" target="_blank">ECB says Bitcoin is artificially propped up, shouldn't be legitimised</a></strong></p>.<p>The investigation is in its early stages, and it is not clear whether prosecutors have determined any wrongdoing by Bankman-Fried, or when they began looking at the TerraUSD and Luna trades. The matter is part of a broadening inquiry into the collapse of Bankman-Fried’s Bahamas-based cryptocurrency empire, and the potential misappropriation of billions of dollars in customer funds.</p>.<p>Federal prosecutors and the Securities and Exchange Commission have been examining whether FTX broke the law by transferring its customer funds to Alameda. Last month, a run on deposits exposed an $8 billion hole in the exchange’s accounts, causing the company to collapse. Bankman-Fried stepped down as FTX’s chief executive when the company filed for bankruptcy on Nov. 11.</p>.<p>FTX is also under investigation for violating US money-laundering laws that require money transfer businesses to know who their customers are and flag any potentially illegal activity to law enforcement authorities, three people familiar with the investigation said.</p>.<p>In a statement, Bankman-Fried said he was “not aware of any market manipulation and certainly never intended to engage in market manipulation.”</p>.<p>“To the best of my knowledge, all transactions were for investment or for hedging,” he added.</p>.<p>Representatives of the US Attorney’s Office for the Southern District of New York in Manhattan declined to comment. Representatives of FTX did not immediately respond to requests for comment.</p>.<p>The focus on possible market manipulation adds to the legal storm brewing around Bankman-Fried. It is illegal for an individual to knowingly stage market activity designed to move the price of an asset up or down.</p>