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Global Regulatory Actions Against FTX

Cointime Staff· 3 min read

FTX filed for U.S. bankruptcy proceedings on Friday, capping a week of turmoil for one of the world's largest cryptocurrency exchanges. FTX and its local units had already attracted scrutiny from regulators around the world.

Here's a roundup of what global regulators are doing about FTX:


FTX is under investigation by the U.S. Securities and Exchange Commission(SEC), the Department of Justice (DOJ) , and Commodity Futures Trading Commission (CFTC) .


The SEC’s investigation, which has been continuing for months, is focused on the company’s U.S. subsidiary, FTX. US, which lists dozens of crypto tokens. Agency officials believe some of these assets, as well as FTX’s lending product, might constitute securities that, under U.S. law, should have been registered with the SEC before being sold to investors, the person said. If that is the case, then the company’s handling of customer assets might also violate laws governing U.S. exchanges.

The Texas State Securities Board(TSSB) 

The Texas State Securities Board(TSSB) is investigating FTX US over allegations it offers unregistered securities products in the U.S. through its yield-bearing service, according to a recent court filing.

California's Department of Financial Protection and Innovation(DFPI)

California's Department of Financial Protection and Innovation(DFPI) announced it was investigating FTX late Thursday."The DFPI is the agency responsible for administering the state's lending and banking laws, the recent California Consumer Financial Protection Law and the state's securities laws, which govern broker dealers, investment advisers, and commodities," the release said.The regulator asked affected persons to contact it to file a complaint.


FTX's group headquarters is in the Bahamas. The Securities Commission of the Bahamas(SCB) said on Thursday it would freeze the assets of FTX Digital Markets, the group's local unit, and also appointed a provisional liquidator for the unit. The powers of the directors of FDM have been suspended and no assets of FDM, client assets or trust assets held by FDM, can be transferred, assigned or otherwise dealt with, without the written approval of the provisional liquidator,” the commission said.


Cyprus's Securities and Exchange Commission asked FTX EU to suspend its operations on Nov. 9, the regulator said on Friday. FTX announced in September it had received approval from the Cypriot regulator to operate as a Cyprus Investment Firm, allowing the company to fully own a local investment firm it had previously acquired. This allowed FTX EU to serve the European Economic Area.


UK Finance Regulator suggests the exchange is operating unlawfully.U.K. Financial Regulator FCA warned consumers not to use the FTX bitcoin exchange.The Financial Conduct  Authority(FCA) had previously alerted clients via a statement on its website that it believed FTX was operating illegally in the nation.


FTX tweeted on Thursday that its local Japanese unit would go into "close only" mode, following the guidance of Japan's Financial Services Agency(JFSA), preventing customers from opening new accounts or trading. The local unit resumed withdrawals on Friday.


FTX’s Australian business was placed into administration and its customers advised not to deposit any money or to make any trades by Australian Financial Security Authority(AFSA).


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