• FTX's downfall labelled as resulting from intentional sabotage by former CEO Sam Bankman-Fried and associates.
  • The US Department of Justice has been asked to hold the responsible entities accountable to the "fullest extent of the law".
  • Sequoia Capital apologized to its investors for the loss of $150 million t due to FTX's collapse.

FTX's former CEO, Sam Bankman-Fried (SBF), recently apologized to its employees, stating he believed the bankrupt company could still be saved. However, lawmakers in the United States intend to hold SBF accountable beyond the apology letter and according to the law.

FTX's collapse wasn't an accident

FTX and its associated 130 companies filing for bankruptcy caused losses to over one million creditors. While SBF may believe he could do something about it, United States Attorney General Merrick Garland and Assistant Attorney General Kenneth Polite have been requested to do something about FTX's ex-CEO himself.

In a letter to the Department of Justice (DOJ), US Senators Elizabeth Warren and Sheldon Whitehouse urged the Attorney Generals to hold the company's executives accountable to the fullest extent of the law. They stated that the DOJ is expected to conduct an investigation into FTX's collapse with the utmost scrutiny. The letter added,

"As this situation unfolds, new facts will undoubtedly shed more light on how Bankman-Fried and his associates' deception has harmed FTX's customers, and customers of any company that was exposed to the contagion – and may reveal that the problems with the crypto industry extend well beyond FTX."

The Senators believed FTX's unbecoming wasn't simply due to careless business decisions and sloppy management practices. According to Senators Warren and Whitehouse, SBF and other FTX executives conducted "intentional and fraudulent tactics" to make money themselves.

To make things right, the letter asked the DOJ to focus on the flesh and blood victims of white-collar wrongdoing. They added that SBF and his associates should also be prosecuted for their crimes if need be.

Sequoia Capital takes accountability

Following FTX's downfall, venture capital firm Sequoia Capital also came forward to report its losses. Sequoia's executives apologized for the $150 million lost on the crypto exchange on a call with its fund investors. The partners stated that the due diligence for FTX's investment was sabotaged by SBF himself. This was because he failed to disclose the exchange's connections with Alameda Research. 

Thus Sequoia Capital's partners vowed to improve the due diligence for future investments. The executives even believed that the firm would be in the position to have its potential investments audited by one of the Big Four accounting firms.

On the other hand, institutions continue to come forward and report the losses caused by FTX's collapse. As reported by FXStreet earlier this week, Genesis Global Capital also sought to raise about $1 billion to prevent resorting to filing bankruptcy. The company had over $175 million locked up in derivatives on FTX, which were lost.

The company was noted saying,

"Our goal is to resolve the current situation consensually without the need for any bankruptcy filing. Genesis continues to have constructive conversations with creditors."

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Join Telegram

Recommended content

Recommended Content

Editors’ Picks

MANTA suffers 4% pullback after unlocking tokens worth $40 million

MANTA suffers 4% pullback after unlocking tokens worth $40 million

Manta Network (MANTA) unlocked over 8% of its circulating supply on Thursday. The unlocked tokens were airdropped and distributed in public sale, according to data from Tokenunlocks. 

More Cryptocurrencies News

XRP struggles to recover as lingering Ripple lawsuit could reach Supreme Court, former SEC litigator says

XRP struggles to recover as lingering Ripple lawsuit could reach Supreme Court, former SEC litigator says

The SEC vs. Ripple potential showdown at the Supreme Court is likely, says former SEC litigator Ladan Stewart. XRP Ledger calls developers, businesses and investors to build on the blockchain, extending Apex 2024 registration until April 30. 

More Ripple News

Bitcoin Layer 2 Merlin chain TVL climbs 20%, defying broad market correction

Bitcoin Layer 2 Merlin chain TVL climbs 20%, defying broad market correction

Merlin chain’s TVL added 20% this week, and crossed $800 million on Thursday. Bitcoin Layer 2 assets noted double-digit losses in the past week. Stacks, Elastos, SatoshiVM, BVM are hit by a correction as Bitcoin hovers around $61,000. 

More Bitcoin News

If Bitcoin restarts bull run, these altcoins are likely to explode Premium

If Bitcoin restarts bull run, these altcoins are likely to explode

If Bitcoin’s consolidation ends and the bull run resumes, altcoins are likely going to trigger a massive rally. Last cycle’s hot tokens like SOL, AVAX, WIF, ONDO, etc., could see renewed enthusiasm. 

More Cryptocurrencies News

Bitcoin: BTC’s rangebound movement leaves traders confused

Bitcoin: BTC’s rangebound movement leaves traders confused

Bitcoin (BTC) price has been hovering around the $70,000 psychological level for a few weeks, resulting in a rangebound movement. This development could lead to a massive liquidation on either side before a directional move is established. 

Read full analysis