US regulators the Department of Justice (DoJ), the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission are probing beleaguered crypto exchange FTX.

See related article: What a difference a day makes: Options for FTX after Binance ditches buyout? 

Fast facts

  • According to the Wall Street Journal’s (WSJ) report on Thursday, the Justice Department will prosecute violations, including fraud, while the SEC will enforce civil investor protection laws. 
  • The SEC and CFTC are scrutinizing the relationship between and FTX US, according to Bloomberg.
  • The SEC is also seeking information on the relationship between FTX’s cryptocurrency exchange and its founder’s trading firm, Alameda Research, according to the WSJ report.
  • The WSJ report said that SEC officials had contacted FTX’s lawyers to request more documents, but the regulator might not hear back soon as most of FTX’s legal and compliance staff resigned on Tuesday night, according to media outlet Semafor.
  • FTX, the crypto exchange that has been experiencing a liquidity crisis since Monday, lost a bailout promise from the largest crypto exchange Binance on Thursday after Binance commented on FTX’s “mishandling of client funds” and that “the issues are beyond our control or ability to help.”
  • Bloomberg’s report cited an unnamed source saying that FTX faces a US$8 billion funding shortfall and needs US$4 billion immediately to remain solvent.

See related article: Binance backs out of FTX acquisition; latest updates