World News | Embattled Crypto Exchange FTX Files for Bankruptcy

New York, Nov 11 (AP) Embattled cryptocurrency exchange FTX, short billions of dollars, is seeking bankruptcy protection following its collapse this week.

FTX and its CEO and founder Sam Bankman-Fried are under investigation by the Department of Justice and the Securities and Exchange Commission to determine whether any criminal activity or securities offenses were committed. The person could not discuss details of the investigations publicly and spoke to The Associated Press on condition of anonymity.

Also Read | Sex Worker Who Burnt Alive Young Couple and Newborn Child in Australia’s Victoria Gets Eight Years in Jail.

The investigation is centering on the possibility that the firm may have used customers' deposits to fund bets at Bankman-Fried's hedge fund, Alameda Research. In traditional markets, brokers are expected to separate client funds from other company assets. Violations can be punished by regulators.

FTX had agreed earlier this week to sell itself to bigger rival Binance after experiencing the cryptocurrency equivalent of a bank run. Customers fled the exchange after becoming concerned about whether FTX had sufficient capital.

Also Read | Pakistan: Security Beefed Up at Former PM Imran Khan's Lahore Residence Amid Threats.

The crypto world had hoped that Binance, the world's largest crypto exchange, might be able to rescue FTX and its depositors. However, after Binance had a chance to look at the books of FTX, it became clear that the smaller exchange's problems were too big to solve. (AP)

(The above story is verified and authored by Press Trust of India (PTI) staff. PTI, India’s premier news agency, employs more than 400 journalists and 500 stringers to cover almost every district and small town in India.. The views appearing in the above post do not reflect the opinions of LatestLY)