SEC Investigates Whether FTX Investors Followed Due Diligence Procedures

According to reports, the US Securities and Exchange Commission has asked several FTX investors whether they did adequate research on the cryptocurrency exchange before becoming clients.

Remember that the platform (considered one of the industry's behemoths) failed in November, triggering multi-billion dollar losses and rocking the entire market to its core.

• According to Reuters, before investing in FTX, the American financial regulator requested information from several firms regarding their due diligence processes.

• The SEC's investigation attempts to establish why investors chose the crypto platform and whether they used any techniques at all.

• The review does not imply that such businesses are the targets of the investigation into FTX and its former CEO, Sam Bankman-Fried (SBF).

• However, it may imply that investment funds and venture capital businesses exposed to the exchange may face regulatory scrutiny despite being considered victims of the alleged swindle.

• Previously, US officials sought information from FTX investors regarding their interactions with the company's executives.

• The fall of the trading platform is one of the worst chapters in cryptocurrency history. In November, the firm, which was previously valued at $32 billion, encountered serious liquidity troubles and refused to satisfy consumer withdrawal requests.

• It declared bankruptcy, and its former CEO, SBF, was arrested and detained in the Fox Hill Prison in the Bahamas.

• He was then deported to the United States, where he was released on a record $250 million bond. He is currently residing at his parents' home and is required to wear a monitoring device at all times.

• He just pled not guilty to charges of willfully defrauding investors out of billions of dollars. His trial is scheduled for October 2.

As a reminder, WikiBit is ready to help you search the qualifications and reputation of projects in a bid to protect you from hidden dangers in this risky industry!