FTX Advisors Shares Client Information With FBI: Report
According to court documents seen by Bloomberg, the bankruptcy of crypto exchange FTX Advisors is related to client transactions and the Federal Bureau of Investigation (FBI).
In response to subpoenas issued by several FBI field offices over the past few months, FTX Advisors turned over to law enforcement records of certain clients' trades at the bankrupt crypto exchange.
The FBI's requests were made public on billing records from Alvarez and Marsal, who served as FTX's financial advisors. In the past few months, the firm's employees have released business information from some clients to FBI offices in Portland, Philadelphia, Oakland, Minneapolis and Cleveland.
The filings did not reveal what kind of investigation the FBI conducted or who the target was, although one of the filings mentions a grand jury subpoena.
According to court filings, Alvarez and Marsal responded to a subpoena served by the FBI's Philadelphia office in September for transaction data from cloud computing provider FTX. He investigated customer accounts and transactions in July at the request of the FBI's Oakland office. Additionally, in August, the firm released customer information related to certain transactions pursuant to a subpoena from the FBI's Portland office.
FTX customers will ultimately pay for the work. According to Bloomberg, two consultants received more than $21,000 in invoices for FBI-related services in July, August and September. In total, Alvarez and Marsal have charged FTX nearly $100 million in fees since November 2022, court records show. The amount will be deducted from the recovery for FTX customers.
FTX's new CEO, John J. Ray III, recently revealed that the exchange's customers could receive more than 90% of their assets by the end of 2024 as a result of a proposed resolution between FTX's lenders and borrowers.
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