NORTH CAROLINA (QUEEN CITY NEWS) – “What h-a-p-p-e-n.” 

These are the latest tweets from Sam Bankman-Fried, CEO of collapsed Crypto exchange FTX. His customers are wondering the same thing.

“Financial fraud, wire fraud, false advertising, misappropriation of funds, embezzlement,” said Robert Ross, founder of Tikstocks.

The details have yet to unravel, but those in the cryptocurrency world say, on the surface, things aren’t looking good.

“If you are taking client funds and reallocating them without their knowledge or consent and then losing all that money on top of that, and then lying about it afterward,” said Ross.

FTX collapsed last week after customers fled the exchange following increased concerns about whether or not FTX had sufficient capital.

Now, it’s short billions of dollars, leading to an investigation by the Justice Department and Security and Exchange Commission.

“When do we have problems? When do investors get hurt? It’s when we have a lack of disclosure,” said Gary Gensler, SEC Chairman.

It’s a complex story with many tentacles, but here’s where North Carolina comes into play. 

According to Open Secrets, a nonpartisan nonprofit that tracks money in politics, Bankman-Fried and other FTX executives donated tens of millions of dollars to political PACs, which then contributed to candidates in the 2022 Midterm elections.

This includes some hotly contested races in the Tar Heel state.

“I think the number two for Democrats behind George Soros,” said Ross. “We don’t really know if Sam Bankman-Fried had been using customer deposits to make some of these donations, which is kind of like an ’emperor wears no clothes’ situation where it seems like he was just pulling money from anywhere possible in order to meet his obligations and try and accomplish his goal of becoming the premiere exchange.”

He was seen as the Crypto king, with an ambitious goal to lead regulation in the industry, speaking before the House Financial Services Committee in Dec. of last year.

“We strive to conduct all of our business on a transparent, regulated manner,” said Sam Bankman-Fried, in Dec. 2021.