UPDATE - Crypto exchange FTX faces US probe amid market meltdown

ADDS FTX CEO'S COMMENTS

By Ovunc Kutlu

ANKARA (AA) - FTX, the world's third-largest cryptocurrency exchange by volume, is facing US investigations amid financial turmoil that is causing a sudden meltdown in the cryptocurrency market.

The US Justice Department and Securities and Exchange Commission (SEC) are investigating FTX, according to news reports Wednesday.

The SEC is handling the firm's domestic subsidiary, FTX.US, and hundreds of cryptocurrencies and tokens listed on the exchange. The regulator is also looking into if some of the assets are regarded as securities that should have been registered with the SEC under American trade laws.

The market watchdog may enforce penalties if it concludes that the platform's investors were not protected.

The Justice Department is investigating criminal violations, such as fraud, which could result in prosecutions, according to the reports.

FTX asked Binance, the world's biggest cryptocurrency exchange by volume, for help Tuesday with a buyout. While Binance co-founder and CEO Changpeng Zhao said FTX has "a significant liquidity crunch," the company announced Wednesday that the deal will not go through.

The price of Bitcoin dove below $16,000 late Wednesday, giving up all gains in the past two years, while the crypto market lost more than 20% in value in the last two days.

FTX’s founder and CEO Sam Bankman-Fried apologized to investors in a series of tweets Thursday.

"I'm sorry. That's the biggest thing. I (expletive) up, and should have done better," he wrote. "Because at the end of the day, I was CEO, which means that *I* was responsible for making sure that things went well. *I*, ultimately, should have been on top of everything. I clearly failed in that.”

Bankman-Fried said FTX's priority in the future will be "radical transparency" so that all involved actors would have full information about the firm's operations.

"All of the stakeholders would have a hard look at FTX governance. I will not be around if I'm not wanted. All of the stakeholders--investors, regulators, users--would have a large part to play in how it would be run. Solely trust," he said.

He noted that the company’s financial turmoil was about FTX International, while the US-based exchange, FTX.US, has not been financially affected.