The U.S. Division of Justice (DOJ) is joining the Securities and Alternate Commission (SEC) in an investigation into FTX’s ongoing liquidity crisis.

A represent from Bloomberg on Wednesday, citing sources conversant in the matter, disclosed the DOJ’s interest within the FTX-connected turmoil and the replace’s skill liquidity mismanagement.

The DOJ is truly the most up-to-date regulator to hitch an ongoing probe by the SEC and the Commodities and Futures Purchasing and selling Commission (CFTC) in taking a see into whether or no longer FTX mishandled person funds. While enforcement actions by the SEC and CFTC incur civil penalties, those by the DOJ can furthermore consequence in criminal convictions, which like extra severe punishments.

The Texas Securities Board launched a separate investigation final month into FTX’s alleged unregistered securities providing.

The bancrupt crypto replace’s downward spiral started only final week, after insecure clients started withdrawing their sources from the platform fearing its skill insolvency. On-chain records that documented the replace’s hasty depleting crypto reserves extra enforced fears that FTX CEO Sam Bankman-Fried attempted to dispel.

“FTX has ample to quilt all client holdings. We don’t make investments client sources (even in treasuries). Now we like been processing all withdrawals, and would possibly per chance maybe likely maybe proceed to be,” wrote Bankman-Fried in a Nov. 7 tweet that has since been deleted.

Basically based totally on a represent from the Wall Road Journal, the FTX CEO suggested traders on Wednesday that the replace needs an $8 billion emergency capital injunction to fulfill withdrawal requests.

Till lately, Bankman-Fried became largely within the CFTC’s correct books, even making a case for in an instant clearing crypto swaps forward of a roundtable of CFTC regulators in Washington D.C, CoinDesk reported in Might per chance well likely.

Ben Hunt, co-founding father of the Epsilon Theory e-newsletter, revealed in a tweet that CFTC Commissioner Caroline Pham has now deleted all tweets and “chummy references” of herself with Bankman-Fried.

“CFTC and Democrats like been palling round with SBF, suing DAOs and devs, decrying the scourge of DeFi and plotting to preserve watch over websites and wallet APIs while FTX played with buyer money,” wrote Gabriel Shapiro, overall counsel at Delphi Labs, in one other tweet.

“SEC can also’ve long previous after FTT as a security. As a substitute they sued a runt under-resourced YouTube fork that gave tokens to video creators as rewards for their creativity,” he added.