U.S. Fed Creates a Task Force to Track Stolen User Funds Form FTX

  • US Attorney announces the formation of a task force to uncover the stolen customer funds from FTX.
  • Task force working around the clock to counter the FTX disintegration.

The Southern District of New York (SDNY) has instituted a Taskforce intending to trace and recover FTX victim’s lost assets. The announcement came from United States Attorney Damian Williams, the federal prosecutor in the FTX case. 

William stated that “the southern district of new york is working around the clock to respond to the implosion of FTX.” he added, “it is an all-hands-on-deck moment.”

On 3 January 2023, Samual Bankman-Fried pleaded not guilty to eight criminal charges. This includes money laundering, conspiracy to commit wire fraud and violations of campaign finance laws.

SDNY, the responsible for the recent developments related to the ongoing case against FTX and its members. SDNY operates under the U.S. Development of Justice (DOJ).

Task Force Operations

The nucleus of the Taskforce is to pursue and recover funds of FTX customers lost during the collapse of the crypto exchange. However, the task force also regulates the investigation and prosecutions related to FTX, using asset forfeiture and cyber capabilities.

Reportedly, the Securities and exchange commission estimated that FTX users lost $8 billion of their funds via fraud—-about $3.5 billion of those assets appear to be held by regulators in the Bahamas. On the other hand, $372 million of funds were lost in a hack on FTX.

Andrea Grieswold will be forefront of the task force with all her previous experience in investigating Terra’s implosion which occurs in last summer. Grisworld, William’s chief counsel. Including securities and commodities fraud unit, money laundering, public corruption unit, and transnational criminal enterprises unit.

FTX’s new management also hired a financial advisory company, Alixpartners, in late December to conduct “asset-tracing” for missing assets of FTX.

SBF pleaded “not guilty” to all eight criminal charges, including fraud and money laundering—connected with the FTX collapse, which carries a total of 115 years of prison for him if he is convicted. 

The two executives of the FTX, Gary Wang, co-founder of FTX and Caroline Ellison, former CEO of Alameda Research, pleaded guilty to federal fraud charges into their role in the collapse of crypto exchange FTX.