Cryptocurrency Fraud, Fraud Management & Cybercrime
New York District Hopes to Recover Missing Assets, Probe Crypto Firm’s Collapse
Rashmi Ramesh (rashmiramesh_) •
January 4, 2023
Federal prosecutors have established a task force to trace and recover customer funds missing from FTX and manage investigations related to the cryptocurrency firm’s collapse.
The US Attorney’s Office for the Southern District of New York’s task force will “ensure that this urgent work continues, powered by all of SDNY’s resources and expertise until justice is done,” says US Attorney Damian Williams, the federal prosecutor in the FTX case that led to the arrest of founder Sam Bankman-Fried, according to media reports.
A unit of the task force responsible for probing the comprised collapsed senior prosecutors with expertise in securities and commodities fraud, public corruption, money laundering and transnational crime enterprise units. A separate unit with “asset security and cyber capabilities” will focus on tracing and recovering missing customer funds.
FTX, under new CEO John Ray’s management, has already put a task force in place to carry out similar activities. It is unclear whether the company’s team will join forces with the government executives. FTX also engaged financial advisory company AlixPartners in December to trace the missing funds, The Wall StreetJournal reported.
A week ago, the US Department of Justice announced investigations into the theft of nearly $400 million from FTX. The crypto exchange disclosed in November – the day after it was filed for Chapter 11 bankruptcy – that the theft was linked to “unauthorized access” of FTX’s systems.
An unidentified hacker using the moniker “accounts drainer” stole the funds, FTX acknowledged on Nov. 12. The company said it