U.S. prosecutors opened probe of FTX months before its collapse – Bloomberg News

(Reuters) -Crypto exchange FTX was on the radar of federal prosecutors in Manhattan months before its collapse, Bloomberg News reported on Monday citing people familiar with the investigation.

The U.S. Attorney’s Office for the Southern District of New York spent months working on a sweeping examination of cryptocurrency platforms that have U.S. and offshore arms including FTX’s massive exchange operations, the report added.

A representative of the concerned U.S. Attorney’s Office declined to comment on the matter, while FTX did not immediately respond.

The implosion of FTX has spread ripples across the industry, hobbling liquidity at firms with exposure to what was once one of the world’s biggest crypto exchanges, prompting investigations by regulators in several countries. It has fanned fears about the future of the crypto industry after FTX outlined a “severe liquidity crisis”.

Earlier this month, FTX filed for U.S. bankruptcy protection and its founder Sam Bankman-Fried resigned as chief executive, after rival exchange Binance walked away from a proposed acquisition.

Several crypto firms have since been bracing for a fallout from the FTX collapse, with many counting their exposure in millions to the beleaguered exchange.

(Reporting by Manya Saini in Bengaluru; Editing by Krishna Chandra Eluri)