FTX Brings Former Regulators On Board To Investigate The Firm’s Implosion

Cryptocurrency exchange FTX has brought on board a suitable team consisting of former senior U.S. regulators to help untangle the matter.

FTX, a cryptocurrency exchange whose recent collapse raised issues about the presence or absence of regulatory oversight, has brought on board a suitable team consisting of former senior U.S. regulators to help untangle the matter.

According to a lawyer representing the defunct cryptocurrency exchange FTX in its first hearing in Delaware bankruptcy court on Tuesday, FTX has hired former regulators from the United States Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). 

The Wall Street Journal reported that investigations firm Nardello & Co., blockchain data platform Chainalysis, a cybersecurity company and partners from the law firm Sullivan & Cromwell LLP are all part of the panel. 

The statistics show that Chainalysis can handle digital assets and the cybersecurity company can assist with other activities, while Nardello & Co. specializes in anti-corruption and fraud investigations.

According to the report, the firm has hired Steven Peikin, who formerly worked as the co-director of the enforcement division at the SEC from 2017 to 2020, as well as James McDonald, who previously worked at the CFTC as the director of enforcement during the same time period. 

Nicole Friedlander was another attorney whom FTX recruited to work for the company who is currently a lawyer at Sullivan & Cromwell and formerly served as chief of sophisticated frauds and cybercrime at the United States Attorney’s Office for the Southern District of New York.

James Bromley, a partner at Sullivan & Cromwell and counsel to FTX’s new managers, testified on their behalf in court on Tuesday (Nov. 22), saying that:  

“It’s fair to say, we typically would not quote things that happen on Twitter, but there was a quote that I think summarizes this quite well, which is, ‘What appears to be taking place is a serious investigation by serious adults.’” 

Consequences Of FTX’s Demise

Many negative developments have arisen as a consequence of FTX’s demise including Bankman-Fried resigned as FTX’s CEO on November 11 prior to the FTX filed for bankruptcy. SBF has recently issued an internal letter where he acknowledged his mistakes.