Feds have contacted former FTX employees as part of investigation

Quick Take

  • Former FTX employees tell The Block they have been contacted federal law enforcement for more information into the company’s downfall. 
  • The investigative outreach is part of a broader probe into the company’s operations. 

Federal law enforcement is in touch with former FTX employees as part of a criminal investigation into the failed exchange and its sister hedge fund Alameda Research. 

Two former FTX employees have been contacted by federal authorities as part of what they believe to be a broader effort to collect information about the inner workings of the failed exchange and hedge fund, they confirmed to The Block. The contact is still at the request for information stage, rather than court-issued subpoenas for records or other information. The employees did not provide details on what information authorities sought. 

The outreach is one piece of a broader federal probe into the companies involving the Justice Department, the Securities and Exchange Commission, the Commodity Futures Trading Commission and state regulators. FTX's bankruptcy lawyers have also said in court that new CEO John Ray III is cooperating with law enforcement and regulators

In bankruptcy court proceedings, Ray lamented a lack of substantial record-keeping at the company, a common red flag for prosecutors, who reportedly had an ongoing investigation into the company well-before its public collapse.

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Bankman-Fried claimed statements made by Ray and company lawyers in court were false in a recent interview with The Block, but has also claimed not to remember certain details. 

The House Financial Services Committee has invited Bankman-Fried to testify next week at a hearing on FTX's collapse. He has so far declined, saying he might appear after he has "finished learning and reviewing what happened," at his own companies. The committee is weighing a subpoena to compel his appearance, though one remains unlikely due to complications around enforcement. 


© 2023 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

About Authors

Kollen Post is a senior reporter at The Block, covering all things policy and geopolitics from Washington, DC. That includes legislation and regulation, securities law and money laundering, cyber warfare, corruption, CBDCs, and blockchain’s role in the developing world. He speaks Russian and Arabic. You can send him leads at [email protected].
Frank Chaparro is Host of The Scoop podcast and Director of Special Projects. He also writes a biweekly newsletter. Chaparro started his career at Business Insider, where he specialized in the intersection of digital assets and Wall Street, market structure, and financial technology. Soon after joining Business Insider out of Fordham University, Chaparro was interviewing top finance and tech executives, including billionaire Mark Cuban, “Flash Boys” star Brad Katsuyama, Cboe Global Markets CEO Ed Tilly, and New York Stock Exchange President Tom Farley. In 2018, he become a sought after reporter in the crypto world, interviewing luminaries such as Tyler Winklevoss, the cofounder of Gemini, Jeremy Allaire, the CEO of Circle, and Fundstrat head Tom Lee. For inquiries or tips, email [email protected].

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