US Regulators Probing FTX and Alameda Research Over Potential Mishandling of Customer Funds: Report

US financial regulators are reportedly investigating embattled crypto exchange FTX and whether it mishandled its customers’ funds.

According to a report by Bloomberg, FTX and its trading arm Alameda Research are under investigation by the U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC).

The news agency reports that unnamed sources say the investigations relate to the liquidity crisis at the firm that has led to a possible buyout by the world’s crypto exchange giant Binance.

Sources tell Bloomberg that the SEC probe began “months ago” and was focused on FTX US, the exchange’s US arm.

“In recent days, the regulators have asked for details about the ownership structure of FTX US and FTX.com, which caters to non-American clients, according to two of the people. Regulators are interested in any overlap between management and board structures, and the financial relationship between the two entities. The agencies have also asked for details on whether customer accounts were properly segregated and the composition of the investor base at FTX.com, said one of the people.”

The two US regulatory agencies declined to comment in Bloomberg’s report.

Since Binance indicated it may buy out FTX following a closer examination of its financials, it is unclear whether Binance will actually go through with the acquisition.

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