The legal troubles of crypto entrepreneur Sam Bankman-Fried “SBF,” founder of FTX Tokens, continue to escalate as new investigations emerge. Bragar Eagel & Squire, a prominent shareholder rights law firm, has launched an investigation into potential claims against FTX Tokens, G-III Apparel Group, Bright Green Corporation, and Consensus Cloud Solutions.
The investigation centers around possible violations of federal securities laws and other unlawful business practices by these companies.
The latest developments have added to the ongoing woes of SBF, who is already facing charges related to the misappropriation of FTX users’ funds.
FTX’s downfall
The problems for FTX began on November 2, 2022, when Coindesk published an article detailing alleged issues with Alameda Research and its close relationship with FTX, along with Alameda’s large FTT holdings.
This was followed by Binance’s announcement on November 6, 2022, that it would liquidate its FTT holdings due to “recent revelations that have come to light.”
On November 8, 2022, The Wall Street Journal reported that Binance had entered into a non-binding agreement to purchase FTX, but this fell through on November 9, 2022, leaving FTX with a shortfall of up to $8 billion.
The sudden liquidity crunch and the collapse of the deal with Binance triggered a sharp fall in the price of FTT on heavy trading volume.
On November 10, 2022, The Wall Street Journal reported that the SEC and DOJ were investigating FTX. The latest developments have led to further investigations into FTX Tokens by Bragar Eagel & Squire, who are examining whether the company has violated federal securities laws and engaged in other unlawful business practices.
SBF’s revised bail package
Meanwhile, SBF’s legal troubles have compounded as he faces a new challenge regarding his use of encrypted-messaging apps and VPN services while out on bail.
Following the judge’s displeasure with SBF’s use of Signal, an end-to-end encrypted messaging service, SBF’s lawyer has presented a revised bail package to Judge Lewis Kaplan of the Southern District of New York.
In the letter to the judge, Christian Everdell, SBF’s lawyer, stated that they were “close to a resolution” and would soon present the court with a proposed order outlining the revised conditions.
SBF, who maintains his innocence, could face up to 115 years in jail if found guilty under the eight counts against him.
Fallout
The ongoing legal proceedings surrounding FTX have caused significant turmoil in the crypto world, leading to investigations by the SEC, DOJ, and other regulatory bodies.
SBF’s legal troubles have compounded as he faces new challenges regarding his use of encrypted-messaging apps and VPN services while out on bail.
As investigations into FTX Tokens continue, the future of the crypto exchange remains uncertain, and the fallout from its downfall is likely to continue for some time.
The sharp fall in the price of FTT on heavy trading volume has sent shockwaves through the crypto community, with investors and traders expressing concern about the implications for the broader crypto market.
The ongoing investigations by regulatory bodies and shareholder rights law firms could have far-reaching consequences for the crypto industry and the broader financial system.
