Feds Launch FTX Task Force to Recover Customer Funds Worth $3 Billion

Feds Launch FTX Task Force to Recover Customer Funds Worth  Billion

New York prosecutors have created an FTX Task Force to investigate the collapse of the crypto exchange. The team will work to trace and recover the missing FTX client funds, which amount to at least $3 billion. The effort came after former FTX CEO Sam Bankman-Fried pleaded not guilty to fraud and conspiracy charges. Loading Something is loading.

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US prosecutors in New York have created an FTX Task Force to find and recover billions of dollars in missing funds belonging to customers of the collapsed crypto exchange.

More than 1 million customers may be affected by what the US government has described as an epic FTX scam. Its former CEO, Sam Bankman-Fried, faces criminal charges alleging he funneled client funds from the crypto trading platform to FTX’s sister trading arm, Alameda Research.

“The Southern District of New York is working around the clock to respond to the FTX outbreak,” Manhattan U.S. Attorney Damian Williams said in a statement to CNBC on Tuesday. “It’s a comprehensive moment.”

The task force team brings together senior prosecutors with expertise in securities and commodities fraud, public corruption, money laundering and transnational criminal enterprises. They will investigate and prosecute matters related to the FTX collapse, according to the SDNY.

Investors in FTX lost over $8 billion due to alleged fraud at the now-bankrupt crypto group, the Securities and Exchange Commission said in its complaint. The FTX businesses are estimated to owe their biggest creditors up to $3 billion, according to the Financial Times, while Reuters reported that Bankman-Fried transferred at least $4 billion in FTX funds, including customer money, to Alameda.

In an effort to protect customer assets from loss or theft, more than $3.5 billion in crypto assets were seized by Bahamian regulators in late December.

FTX customers have been trying to get their money back stuck in the embattled crypto exchange that filed for Chapter 11 bankruptcy last November. Some are selling their bankruptcy claims at deep discounts so they don’t have to wait through a lengthy bankruptcy process, while others have filed class action lawsuits against the firm.

The feds’ announcement comes shortly after Bankman Fried pleaded not guilty in the US government’s criminal case against him. He faces eight counts of financial crimes, including wire fraud and conspiracy to commit money laundering, all of which could land him in prison for life.

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