FTX faces federal probes as FTX Ventures and Alameda sites go dark

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Key points to remember

  • The FTX Ventures and Alameda Research websites were taken offline today due to FTX’s solvency issues.
  • The pullback came around the time Bloomberg reported an extensive regulatory investigation into FTX.
  • FTX is believed to be insolvent, and its survival depends on an acquisition from its competitor, Binance.

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FTX’s predicament continues – two of its related websites have been taken offline as the company faces increasing regulatory scrutiny.

Alameda and FTX Ventures go offline

Two FTX-affiliated sites – those of FTX Ventures and Alameda Research – have gone dark as beleaguered companies face outright collapse. As of approximately 7:00 p.m. UTC on Thursday, November 9, these websites were no longer accessible.

The first website affected by the takedown is that of FTX Ventures, the venture capital arm of the company. The second website affected was that of Alameda Research, a trading company founded by FTX CEO Sam Bankman-Fried.

Employees were apparently not informed of the teardowns or any other rumors about the state of the companies. Amy Wu, FTX Ventures Executive said today which she “finds out with everyone on Twitter”.

The company’s two cryptocurrency exchange websites, FTX.com and FTX.US, are still live. However, earlier reports suggest customer withdrawals have been suspended and the company has since advised customers not to deposit any further funds.

Federal investigation

The sites went dark hours after US regulators probed the businesses of the Bankman-Fried empire.

According to Bloomberg, the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) are investigating these companies in connection with the crypto lending liquidity crisis.

Although this investigation began months ago, it has reportedly expanded recently as regulators began investigating the ownership structure of FTX.US and FTX.com. Regulators are looking at whether there is an overlap between company executives, how the companies are linked financially, the composition of each company’s investor base and whether user accounts are separated.

It is unclear whether recent developments in this probe prompted today’s site takedowns. However, there may be regulatory and organizational concerns at play, as the relationship between Alameda Research and FTX Ventures has sparked controversy in the past.

On the other hand, broader financial issues may have motivated the site takedowns. Alameda Research was reportedly “entirely illiquid” in early November. Meanwhile, discussions of FTX’s financial troubles began on Monday and continued throughout this week.

The company’s survival seemed to briefly hinge on a last-minute acquisition deal with Binance; however, it was reported this afternoon that Binance would walk away from the proposed deal amid rumors that the company mismanaged customer funds and after learning more about the state of its finances.

Disclosure: At the time of writing this article, the author of this article owned BTC, ETH, and other digital assets.

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