FTX Fraud Suits Offer Blueprint for Pursuing Offshore Crypto Exchanges

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FTX Fraud Suits Offer Blueprint for Pursuing Offshore Crypto Exchanges
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The CFTC’s lawsuit against FTX is taking advantage of leeway granted in legislation passed over a decade ago after the 2008-09 financial crisis

In less than 24 hours, FTX founder Sam Bankman-Fried was arrested, charged with eight counts of fraud and sued by the Securities and Exchange Commission and the Commodity Futures Trading Commission. WSJ explains how the day unfolded. Photo: Dante Carrer/ReutersFTX was one of the largest overseas crypto exchanges, based on a Caribbean island with a friendly regulatory regime, and arguably beyond the reach of U.S.

rules that govern how trading firms deal with investors and consumers.show how U.S. regulators have found a way to police global crypto conduct they don’t closely regulate. The Commodity Futures Trading Commission alleged, for instance, that Bahamas-based FTX affected the price of commodities sold in the U.S. That gave the CFTC authority to file a civil fraud lawsuit against FTX founder Sam Bankman-Fried and his companies.

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