New FTX Developments Continue to Shake Up Crypto Markets

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(Kitco News) – Even as markets struggle to deal with the FTX bankruptcy and its contagion, new developments around the exchange and its affiliated companies continue to unfold.

Reports surfaced Monday night that the US Department of Justice opened an investigation into FTX months before the crypto exchange collapsed. Bloomberg reported that the US Attorney’s Office for the Southern District of New York spent months examining FTX on suspicion that it was violating the Bank Secrecy Act, which requires financial institutions to prevent money laundering and terrorist financing.

The Department of Justice allegedly thought that Bahamas-based FTX.com was still serving customers in the United States, rather than having them go through FTX.US, which was believed to be compliant.

Tuesday morning brought reports that FTX funds have been used to purchase more than 19 properties worth $121 million in the Bahamas since 2020, according to the country’s official property records. FTX’s property purchases included seven condominiums in the resort community of Albany, where the company’s headquarters were located, costing nearly $72 million.

Another waterfront home purchased by FTX in Old Fort Bay was listed for use as a “vacation home” and had SBF parents Joseph Bankman and Barbara Fried as signatories.

“Since before the bankruptcy proceedings, Mr Bankman and Mrs Fried have been trying to return the deed to the company and are awaiting further instructions,” a spokesman for the couple told Reuters.

Two of FTX’s real estate purchases were designated for commercial use, including the $8.55 million housing complex that formed FTX’s headquarters and five acres of land on which offices would be built for the exchange.

Also on Tuesday, Justin Sun, founder of the Tron network, saying the Wall Street Journal that he and his affiliates are looking to buy FTX assets.

“We are open to any type of agreement. I think all the options [are] on the table,” Sun told reporters in Singapore on Tuesday. “Right now, our team is in the Bahamas,” Sun said, explaining that representatives for Tron and digital asset exchange Huobi Global were in the Caribbean nation.

“We are looking at the assets one by one,” Sun said, “but from my understanding the process is going to be long as they are already in this type of bankruptcy proceedings.”

Markets are also awaiting to see what new information comes out of FTX’s bankruptcy court hearing in Delaware later today. Late last week, things were shaping up to be a jurisdictional battle between the liquidators of Bahamas-based FTX Digital Markets, which filed for Chapter 15 bankruptcy in New York, and the leadership of US-based FTX.com, which filed for Chapter 11 in Delaware.

However, ahead of today’s hearing, attorneys representing the US and Bahamian liquidators announced that they had reached an agreement that Chapter 11 proceedings could take precedence.

Meanwhile, analysts continue to watch the on-chain activities of the so-called ‘FTX hacker’, who was last seen. convert tens of millions of dollars of ETH into Bitcoin in an effort to cover their tracks.

The overall cryptocurrency market capitalization has fallen below $790 billion, down more than 20% since the start of the FTX crash earlier this month and down nearly 75% from its high of almost 3 trillion dollars in November 2021.

bitcoin too reached a two-year minimum $15,480 on Monday night.

Disclaimer: The opinions expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure the accuracy of the information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a request to make any exchange of commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept responsibility for loss and/or damage arising from the use of this publication.

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