Crypto exchange BitMart is being investigated by the Federal Trade Commission due to a security breach on the platform last year.
The attack occurred in December 2021 and compromised two of the centralized exchange’s hot wallets. The firm’s CEO, Sheldon Xia, reported that the company’s private key was used to tamper with the wallets, causing a loss of over $200M crypto assets from the Ethereum blockchain and Binance Smart Chain.
In its first ever crypto case, FTC aims to investigate potential law violations in the operations of Bachi.Tech, the parent company of BitMart. The investigation required inquiries about BitMart’s advertised services, allegations from customers who were denied access to their accounts, and security concerns stemming from December 2021’s security breach.
In response, Bachi.Tech sent a petition to suppress or modify 28 CID requests from the investigation, claiming that the CID contains “overly broad” irrelevant requests and the information sought lies outside the US.
The FTC commissioners, however, declined the petition, citing a lack of factual information from Bachi.Tech as the reason behind the denial. Moreover, the order states that the firm failed to schedule a meeting and has not provided any documents requested by the CID.
Lastly, the order states that Bachi.Tech is required to comply with the Civil Investigative Demand by August 19, 2022, at 9 AM (Eastern Time).
