Sam Bankman-Fried, DFPI logo

California financial regulator launches probe into FTX

Posted on


The state of California has launched an investigation into the “apparent failure” of crypto asset platform FTX, California’s Department of Financial Protection and Innovation (DFPI) announced in an official statement.

See related article: Industry reacts: FTX bankruptcy fears rise after Binance scraps rescue

Fast facts

  • “We expect any person offering securities, lender, or other financial services provider that operates in California to comply with our financial laws,” DFPI wrote, stating that individuals affected by FTX’s liquidity crisis can file a complaint on the website.
  • California is the first U.S. state to announce its investigation into FTX following an increased risk of bankruptcy since once-rival Binance dropped its offer to acquire the embattled exchange earlier this week.
  • The three-paragraph press release provided little insight into the investigation, not explaining whether it is on the Bahamas-based FTX or FTX US, a separate U.S. entity. 
  • DFPI’s “File a Complaint” page stipulates that consumers can file complaints when a DFPI licensee or registrant has violated state law or acted improperly, or when a company or person is believed to be conducting unlicensed or unregistered activity that falls within the DFPI’s jurisdiction.
  • Following the liquidity crunch, the U.S. Securities and Exchange Commission (SEC), the Commodity Futures Trading Commission (CFTC) and the Department of Justice (DOJ) have reportedly launched investigations into the crypto exchange.
  • The Texas State Securities Board had already been probing FTX prior to its liquidity crisis for allegations of offering unregistered securities to local residents — however, the oversight role of individual U.S. states into crypto firms remains vague.

See related article: FTX allegedly used customer assets in Alameda bailout: report



Source link

Leave a Reply

Your email address will not be published. Required fields are marked *