SDNY Establishes Special Group to Find FTX Funds

The SDNY has established a special force in order to deal with FTX’s aftermath – and find the money!

The United States Attorney’s Office for the Southern District of New York (SDNY) announced on Jan. 4 that it has tapped senior prosecutors to track down the lost assets of customers after the FTX collapse.

The US financial watchdogs are also launching an “FTX task force” for this special duty.

The FTX Funds…

Prosecutors and agents of the new team have a solid background in securities and commodities crimes, financial corruption, money laundering, and cross-border corporate crimes.

It will be responsible for scrutinizing and prosecuting “matters related to the FTX collapse.”

According to the official statement from Attorney Damian Williams, Attorney for the SDNY who is in charge of the case of FTX and its founder, the SDNY is putting all efforts to quickly resolve the case.

The creation of the FTX Task Force is “to ensure that this urgent work continues, powered by all of SDNY’s resources and expertise until justice is done.”

The federal prosecutor added that the team was also working to track down and recover the ransom after the FTX cryptocurrency exchange went bankrupt.

Massive Losses

The collapse of the top exchange wiped out the $16 billion fortune of Sam Bankman-Fried in less than a week. More than one million customers are frustrated about whether they can get their money back.

The fallout turned Sam Bankman-Fried, from a crypto billionaire, to “nothing.” Meanwhile, another crypto billionaire, Zhao Changpeng of Binance, also saw his net worth drop by $84 billion in 2022.

In efforts to trace missing assets of customers, FTX’s new management also reportedly hired AlixPartners, a financial advisory firm that consulted on some well-known bankruptcy cases including Enron’s.

New updates of the FTX showed that the company’s founder Sam Bankman-Fried pleaded “not guilty” on Tuesday during the New York court hearing. The disgraced billionaire insisted on his innocence and denied accusations by the US Department of Justice.

Bankman-Fried faces 8 criminal charges related to FTX bankruptcy including financial fraud and fraud conspiracy related to his management activities at FTX exchange and investment fund Alameda Research.

If convicted, Sam will face 115 years in prison!

As previously reported, by the SDNY, the former CEO of FTX was under three separate indictments from the Department of Justice, the U.S. Securities and Exchange Commission (SEC), and the Securities and Exchange Commission.

The not-guilty plea means that Sam Bankman-Fried will enter a legal battle to prove his innocence. The first trial of this controversial figure will begin on October 2, 2023, according to a New York court judge.

Prosecutors have stated that they will finish gathering evidence in the coming weeks and will begin releasing pertinent papers.

Prosecutors sought the court once more to warn Sam Bankman-Fried not to access any crypto wallets affiliated with FTX and related entities, implying that he was in possession.

During the trial, Bankman-Fried asked the court not to reveal the other two people who signed his bail application for reasons of privacy and security.

The lawyer representing the former CEO of FTX acknowledged that the client and his family have received several threats in the past and do not want anything harmful to happen. This request was granted by the court.

The FTX debacle triggered a major crisis in the cryptocurrency market. BlockFi, one of the world’s largest cryptocurrency lenders, declared bankruptcy as a result of the FTX exchange crisis.

Genesis Trading, another party associated with FTX, was also in financial difficulty. The Bitcoin market’s turmoil shows no signs of abating.

The community’s fear of the cryptocurrency market’s instability intensified following the rapid collapse of the former crypto giant with frequent removal of funds from the network by users.