A freedom of information request shows UK investors have approached UK police to help recover £2m in lost FTX funds, but the FCA can’t do much to help.
Information obtained by UK newspaper City AM reveals that UK investors lost almost £2 million after FTX collapsed. 32 people contacted the police in the hope of recovering their money.
According to a Freedom of Information (FOI) request by trading website Investing Reviews, police in London contacted 32 people who lost £1.9 million after the implosion of FTX, the Bahamas-based exchange run by Sam Bankman-Fried, in early November. as customers tried to withdraw their money.
The City of London Police is an independent police force responsible for law enforcement within London’s financial district known as the ‘Square Mile’. It is therefore separate from the Metropolitan Police Service which covers the rest of Greater London.
One trader spoken to by police has lost more than £1million since the collapse. The victims ranged in age from a teenager to a person in their seventies.
In the United States, Bankman-Fried faces charges of wire fraud over allegations that client funds were used to fund its sister company, Alameda Research. At this time, two top FTX executives have already pleaded guilty to wire fraud.
“Just the Tip of the Iceberg” by FTX Collapse
Insolvency teams overseeing the liquidation of FTX have recovered more than $5 billion in assets. However, the extent of customer losses remains unclear.
According to Simon Jones, head of Investing Reviews, reported losses from UK clients are likely just the beginning. It’s possible “it’s just the tip of the iceberg,” he said.
Jones warned investors not to put all their money in cryptocurrencies. Also reminding them of the repeated warnings from the Financial Conduct Authority that they could lose all their invested funds.
The Financial Conduct Authority (FCA) oversees cryptocurrency exchanges operating in the UK and can take action against exchanges that break regulations. However, it does not offer any guarantee or assurance for client funds lost due to the collapse or insolvency of an exchange. Currently, crypto companies are only regulated for money laundering.
In addition, disgraced former FTX CEO Sam Bankman-Fried was hit with 12 new charges on Thursday. These included eight counts of fraud, money laundering and other charges related to the collapse of the now-defunct crypto exchange.
Denial of responsibility
BeInCrypto has reached out to a company or individual involved in the story to get an official statement on the recent developments, but has yet to hear back.