Feds probing crypto exchange FTX over handling of client funds: report

Two top US financial regulators are probing whether crypto exchange FTX properly handled customers’ funds, and its relationship with other parts of Sam Bankman-Fried’s crypto empire, Bloomberg News reported on Wednesday.

The Securities and Exchange Commission and the Commodity Futures Trading Commission are probing FTX’s relationship with its American counterpart FTX US and Bankman-Fried’s trading firm Alameda Research, the report said.

The report, citing people familiar with the matter, comes a day after crypto exchange Binance said it would acquire FTX.

A CFTC spokesperson declined to comment. The SEC and FTX did not immediately respond to Reuters’ requests for comment.

Cryptocurrencies saw a second day of sharp declines on Wednesday, as investors continued to fret about the stability of the sector and the financial health of FTX despite plans for a rescue deal from bigger rival Binance.