U.S. Attorney Damian Williams said the office was working "around the clock" to respond to FTX's implosion.
The U.S. Attorney’s Office for the Southern District of New York (SDNY) established the FTX Task Force to “trace and recover” lost client funds and handle investigations and prosecutions related to the exchange’s collapse.
The announcement comes from a statement by U.S. Attorney Damian Williams, the federal prosecutor in the FTX case involving founder Sam Bankman-Fried. Charges against Bankman-Fried by the Manhattan U.S. Attorney's Office include wire and securities fraud, conspiracy to commit wire and securities fraud, money laundering and violations of campaign finance laws.
"The Southern District of New York is working around the clock to address the FTX debacle," Williams said in the statement, adding: "We are activating the SDNY FTX Task Force to ensure this urgent work continues with all of SDNY's resources and expertise until justice is done."
According to SDNY, the task force’s team made up of top prosecutors from its Securities and Commodities Fraud, Public Corruption, Money Laundering, and Transnational Criminal Enterprises division will be tasked with “investigating and prosecuting matters related to the collapse of FTX.” At the same time, it added that its "asset forfeiture and cyber capabilities" will be used to "trace and recover" lost client funds worth billions of dollars.
A similar effort is already underway under FTX's new management, which hired financial advisory firm AlixPartners in December to conduct "asset tracking" of FTX's missing digital assets. The Manhattan U.S. Attorney’s Office reportedly began an investigation into the company’s collapse shortly after FTX filed for bankruptcy on Nov. 11.
The U.S. Attorney's Office for the Southern District of New York is known for prosecuting cases involving violations of federal law and investigating a wide range of crimes "even when they occur in far-flung locations," according to its website. FTX and key executives including Bankman-Fried, co-founder Gary Wang and former Alameda Research CEO Caroline Ellison have been operating out of the Bahamas since September 2021, and many of the accused Crimes are committed there.
On Jan. 3, Bankman-Fried pleaded “not guilty” to all eight criminal charges related to the FTX implosion if convicted, the FTX founder would have been sentenced to 115 years in prison. Last month, Wang and Ellison pleaded guilty to federal fraud charges related to their role in the collapse of the FTX exchange.
