FTX Advisers Share Customer Data with FBI Amid Bankruptcy Proceedings
Summary:
Consultants for the bankrupt cryptocurrency exchange FTX have shared customer transaction and account data with the FBI, responding to multiple subpoenas. The information has been used in undisclosed investigations across several cities. This was revealed through court documents and the billing records of Alvarez and Marsal, a financial consultancy firm working with FTX. The firm's services have cost FTX about $100 million since November 2022, which will be paid out of customer recoveries. Despite this, FTX's new CEO John J. Ray III announced that customers could regain over 90% of their assets by the end of 2024 due to pending settlements.
Consultants for the insolvent cryptocurrency platform FTX have been sharing customer transactional and account information with the Federal Bureau of Investigation (FBI), according to court documents observed by Bloomberg. Over previous months, in line with subpoenas issued by multiple FBI divisions, FTX advisers complied by surrendering detailed customer trading data from the financially ruined cryptocurrency exchange. This compliance is evidenced in the billing statements from Alvarez and Marsal, a firm acting as financial counsellors for FTX. Over a period of time, the staff of the firm collected data from selected customer trades for FBI branches in Portland, Philadelphia, Oakland, Minneapolis, and Cleveland. These billing details, however, did not disclose the nature of the FBI's probe or its target, although reference to a grand jury subpoena is noted in one record. Alvarez and Marsal revealed in a court submission that FTX's cloud-based service data was shared in September, which was a response to a subpoena issued by the FBI’s Philadelphia branch. Also, in the wake of a query by the FBI’s Oakland office, the firm conducted examinations into customer transactions and accounts back in July. Moreover, in August, customer information relating to certain transactions was acquired, adhering to a subpoena from the FBI's Portland division. FTX clients will eventually foot the bill for these services. As reported by Bloomberg, over the period of July, August, and September, two advisers billed over $21,000 for FBI-oriented duties. In total, since November 2022, Alvarez and Marsal's fees from FTX have reached nearly $100 million, as shown in court records. This cost will be taken from the recuperations of the FTX clients. FTX's newly appointed CEO, John J. Ray III, recently disclosed that due to a planned agreement between FTX creditors and debtors, the customers of the exchange may regain more than 90% of their investments by the end of 2024.
Published At
11/3/2023 7:47:32 PM
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