California regulators said Thursday that they are also looking into FTX but didn’t elaborate on the focus of the probe. Bitcoin fell 4.8% while ether dipped almost 5.5%. Ripple, Binance Coin and Dogecoin also sank. Cryptocurrency prices slumped Friday morning after news of FTX’s fall. Zhao ditched the move a day later, raising questions about FTX’s financial viability. Earlier this week, the CEO of rival crypto exchange Binance, Changpeng Zhao, said his company had struck a deal to acquire FTX.
He also warned that the company might have to file for bankruptcy without an imminent infusion of cash. The filing also clouds the fate of BlockFi, a crypto lender that FTX helped bail out with $400 million earlier this year. The Securities and Exchange Commission is trying to determine if employees at Alameda used FTX customer funds to place risky bets on the market, The Associated Press reported. Alameda Research, which is now the target of a federal investigation. FTX’s move marks the third crypto company to seek bankruptcy protection this year, following Voyager Digital and Celsius Network. The bankruptcy filing includes FTX’s U.S.
Before stepping down, Bankman-Fried said FTX was looking for ways to gain liquidity to back up user accounts. Tron’s founder Justin Sun told Reuters that he’s able to help bail FTX out of its financial woes. This week marks the end of FTX’s chapter under the leadership of Bankman-Fried, who is well-respected in the crypto world. FTX announced late Thursday that customers can convert their crypto assets to Tron, a different token owned by blockchain Tronix.