SEC investigates Binance and Coinbase after FTX implosion

According to The Wall Street Journal, the SEC has opened an investigation into the FTX platform, in addition to looking into Coinbase and Binance.

After its sudden collapse this week, the Securities and Exchange Commission (SEC) and the Department of Justice (DOJ) are looking into crypto-currency exchange FTX, according to Wall Street Journal.

Staff members from both law enforcement agencies were contacted Wednesday, the newspaper continued. While the SEC enforces civil investor protection rules, the Justice Department is pursuing criminal offenses, including fraud.

The subject of the SEC’s months-long investigation is the company’s US subsidiary – FTX US.

According to SEC officials, some of the assets listed on FTX’s platform and lending product may be securities and, under U.S. law, should have been registered with the SEC before being sold to investors.

If so, the company’s management of customer assets may also violate regulations governing U.S. exchanges.

Gary Gensler, chairman of the Securities and Exchange Commission, has frequently called for trading platforms like FTX to register with the agency and abide by the same laws that govern conventional exchanges, while promising to launch enforcement campaigns.

Binance pulls out of FTX acquisition deal

Binance has withdrawn from the FTX acquisition transaction after reviewing the company’s financials.

“Due to the company’s due diligence, as well as the latest news reports regarding mismanaged client funds and alleged U.S. agency investigations, we have decided not to pursue the potential acquisition of FTX“, Binance said on its official Twitter page.

Another glimmer of hope comes from Tron founder Justin Sun, who says he is in the process of setting up a solution with FTX. He tweeted, “We will do everything we can to protect our users, including swapping all TRX, BTT, JST, SUN, and HT onto the FTX platform at a 1:1 ratio.“