The U.S. Securities and Exchange Commission (SEC) has launched an investigation into several companies that invested in bankrupt %Cryptocurrency exchange %FTX to determine if they followed proper due diligence procedures.
The Reuters News Agency is reporting that the SEC is investigating whether companies fulfilled their fiduciary duty to their own investors when placing money in FTX.
In December, the SEC charged former FTX chief executive officer (CEO) Sam Bankman-Fried with scheming to defraud investors of $8 billion U.S. In court filings, FTX said that it has more than one million creditors.
The SEC has not said which companies are now under investigation for placing money with the FTX exchange.
The collapse of FTX, which filed for Chapter 11 bankruptcy on November 11 last year, has led to a slew of legal challenges.
Bankman-Fried has also been charged by the U.S. Commodity Futures Trading Commission and Department of Justice with fraud and securities violations. He has pleaded not guilty.
New FTX CEO John Ray has said that governance and record-keeping at the FTX cryptocurrency exchange was the worst he has seen in his 40-year career. And he previously oversaw the Enron bankruptcy.