Bahaman law enforcement is investigating the collapse of cryptocurrency exchange FTX, the Royal Bahamas Police Force announced Sunday, following the exchange’s spectacular undoing and bankruptcy filing last week.
“A team of financial investigators from the Financial Crimes Investigation Branch are working closely with the Bahamas Securities Commission to investigate if any criminal misconduct occurred,” the RBPF announced.
Cointelegraph reported Saturday that FTX’s former billionaire founder Sam Bankman-Fried, co-founder Gary Wang, and director of engineering Nishad Singh are “under supervision” by the local authorities.
Over the weekend, hackers drained approximately $400 million in crypto from FTX, with some on crypto Twitter surmising it was an inside job. FTX US General Counsel Ryne Miller confirmed that unauthorized access had occurred and that the company had also initiated precautionary steps to move its digital assets off the exchange to cold storage.
Following the hack, fintech company Plaid suspended FTX.US access to user data Friday after reports “concerning public reports” of fraudulent activity.
Plaid, which acts as a middleman between financial services apps and users’ banks and credit card providers, previously allowed FTX.US users to link their bank accounts to the FTX app.
The spread
A number of crypto companies are affected by FTX’s collapse. Cryptocurrency exchange Genesis tweeted Thursday that it has $175 million locked in FTX, though its parent company Digital Currency Group has provided a $140 million infusion to support its balance sheet, CoinDesk reported. Cryptocurrency issuer Paxos announced Saturday that federal authorities ordered it to freeze $19 million in crypto tied to FTX.
Ledger, a hardware-based crypto wallet provider, has had such an influx of holdings from crypto investors who offloaded from exchanges that some users weren’t able to process withdrawals Friday, CoinTelegraph reported. The outages have since been remedied.
Analytics provider Glassnode tweeted Sunday that Bitcoin investors are withdrawing coins from exchanges in favor of self-custody at a rate of 106,000 Bitcoin per month, which compares only to three other times historically: April 2020, November 2020, and June-July of this year. Users have withdrawn more than $135 million in Bitcoin from Binance, the rival exchange that almost bailed out FTX last week.
Meanwhile, companies with FTX partnerships have moved quickly to distance themselves from the beleaguered exchange. A spokesperson for Visa told CoinDesk on Monday that the company elected to terminate its partnerships with FTX. In October, Visa and FTX announced that they would be launching crypto debit cards in 40 countries across the globe, at the time bolstering prices of FTX’s native coin FTT.
"The situation with FTX is unfortunate and we are monitoring developments closely. In all our undertakings — in digital currency and beyond — our focus on security and trust remains paramount," the spokesperson told CoinDesk.
Miami-Dade County and NBA’s Miami Heat cut ties with FTX, which had naming rights to the Heat’s arena, shortly after the company announced bankruptcy Friday.
"The reports about FTX and its affiliates are extremely disappointing," the county and team said in a joint statement Friday. "Miami-Dade County and the Miami HEAT are immediately taking action to terminate our business relationships with FTX. We will be working together to find a new naming rights partner for the arena."
The FTX Arena sign has already come down.
Mercedes has also suspended its two-month-old partnership with FTX, removing FTX logos from its F1 race cars.
