Bankman-Fried’s company crash continues to raise questions with the crypto industry. According to an attorney representing FTX, the company hired former US regulators to solve the mysteries surrounding the incident. A conclusive result of these investigations will be significant for the development of new crypto market regulations.
FTX tapped former SEC and CFTC regulators
FTX’s first bankruptcy hearing took place this Tuesday, in Delaware Bankruptcy Court. It was on this occasion that a lawyer representing the company said that FTX hired former members of regulators Americans. They are former SEC and CFTC law officials. These recruits are now associated with the law firm Sullivan & Cromwell LLP, to unravel this case of collapse.
Among the hires is Steven Peikin who served as co-director of the SEC’s enforcement division from 2017 to 2020. FTX has also hired James McDonald. This is the former director of enforcement at the CFTC derivatives regulator. Finally, there is Nicole Friedlander who was head of the complex fraud and cybercrime unit at the United States Attorney’s Office for the Southern District of New York from 2008 to 2016.
Investigations continue
The collaboration brings together experts in the field of US regulation to investigate the FTX case. Their knowledge and experience in this area will help to understand what went wrong in Sam Bankman-Fried’s company. However, these committed people did not comment on this.
The reasons for the collapse of FTX are not completely unknown, but deserve further investigation. The company’s bankruptcy hearing revealed the absence of a substantial amount of assets. This may have been stolen due to a shortage of liquidity and a run on customer deposits. This would have precipitated a leadership crisis that drove FTX to ruin.
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