The investigation is the outcome of the pieces of evidence found for the Fed’s Crypto Fraud Crackdown.
The US Federal Trade Commission has started their investigation on the Cryptocurrency platform operators that recently lost approximately USD 200 Million of investor funds through a crypto cyber attack in 2021.
FTC Investigates BitMart Following $200M Crypto Theft
After President Biden signed an executive order on cryptocurrency investor and consumer protection, the FTC reexamined Bachi. Tech and Spread Technologies (Bitmart’s US Operators).
Back in December 2021, there was a huge amount of USD 200 million stolen from Bitmart, according to the PackShield (A Blockchain Analytics Company).
During the PeckShields ongoing assessment, it was found that the company had lost approximately 100 Million USD worth of Crypto tokens on Ethereum Blcockahin and USD 90 Million on Blockchains like Binance smart chain.
Bitmart’s CEO tweeted that the company would use savings to reimburse user losses. As per the recent investigation, it was found that the hack happened due to a compromised private key. The recovery of losses will happen soon, and customers will be returned their money.
A Brief About Ongoing Investigation
After a brief Investment Disclosure, the agency refused applications from two corporations to stop investigating.FTC has probed that Bachi. Tech or Spread Technologies have misguided consumers about consumer privacy protections and data security.
Also, it is found that it violated several safeguards by the Gramm Leach Bliley Act for Personal information Mandate. Both the companies were represented by the common council, Joseph Evans and Todd Harrison of McDermott Will and Emery.
The company has put some arguments for the observations and said that the records were overboard. The information was irrelevant and difficult to produce because it was outside the US and under foreign law.
But the agency has overruled the arguments and considered them baseless. The arguments for overbreadth and undue burden are unsupported and conclusory. Moreover, foreign law protection does not stop US courts from ordering the disclosure of evidence.
This is one of FTC’s initial steps to combat digital asset fraud. Back in March, a virtual currency mixer, Blender.io, was launched. In July, the department of Justice put various charges on the inside cryptocurrency trading case and into the NFT rug pull case in March.
US Regulators Are On The Way To Scrutinizing Several Crypto Forms
Bitmart is only one of the cryptocurrency companies in the long list of several cryptocurrency forms that US regulators are exploring and trying to understand their operations. The DFPI ( California Department of Financial Protection and Innovation) had begun to investigate several crypto lending companies, such as celsius.
Recently SEC ( US Securities and Exchange Commission) began a probe into Coinbase, Largest Cryptocurrency Exchange, over if it provided investors the unregistered securities or not.