Most of FTX Legal Team Depart as Exchange Collapses
An issue that seems to have massively contributed to major crypto exchange Binance’s decision not to acquire FTX is that a significant part of the latter’s team went for the exit.
According to Semafor, citing people familiar with the matter,
“Most of FTX’s legal and compliance staff quit Tuesday evening, […] leaving few executives who could answer questions that now loom large over the firm.”
Binance – though occasionally accused of withholding information from the regulators – has repeatedly publicly placed heavy emphasis on regulatory oversight and compliance.
This move by a part of the FTX team, at a time when the exchange is facing a liquidity crisis, regulatory scrutiny, and possibly legal issues, would in itself be enough for a company to turn away from acquiring it and getting involved in potential future troubles.
“As regulatory frameworks are developed and as the industry continues to evolve toward greater decentralization, the ecosystem will grow stronger,” Binance said in a statement as it turned away from the FTX-acquiring deal.
The US Securities and Exchange Commission (SEC) has already been investigating FTX’s handling of customer funds and its crypto-lending activities for several months, Reuters reported, citing a source with knowledge of the inquiry.
The report claimed that,
“The SEC is examining whether the platform is following securities laws related to segregation of customer assets and trading against customers, the source said.”
The SEC is also looking into FTX’s relationship with FTX US, said Reuters, while Bloomberg reported that the Commodity Futures Trading Commission (CFTC) and the Department of Justice (DOJ) are investigating the exchange as well.
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