Nikhilesh De is CoinDesk's managing editor for global policy and regulation. He owns marginal amounts of bitcoin and ether.

The U.S. Department of Justice is looking into crypto exchange FTX after its apparent collapse, the Wall Street Journal reported Wednesday.

FTX was already facing probes from state and federal regulators, but these investigations have taken on a new interest following revelations that the company had a liquidity issue. Fellow crypto exchange Binance briefly agreed to acquire the company, but walked away from the deal on Wednesday. Shortly thereafter, Bankman-Fried reportedly told investors that FTX needed $8 billion to continue operating or would risk having to file for bankruptcy protection.

State regulators were previously looking into FTX and whether it allowed U.S. customers to trade derivatives products without either FTX or FTX.US, its U.S. entity, registering with federal regulators.

The U.S. Securities and Exchange Commission and Commodity Futures Trading Commission are also investigating whether FTX had correctly handled its clients' funds, Bloomberg reported earlier Wednesday.

Binance announced Tuesday it would acquire FTX, but said Wednesday that it would not, citing concerns about FTX's books, which is an issue investigators may look into.

"The issues are beyond our control or ability to help," Binance said in a statement Wednesday. The statement also cited news reports about "mishandled customer funds and alleged US agency investigations" as reasons for pulling out of the deal.

Sam Bankman-Fried, FTX's founder and CEO, had also previously tweeted that his company "is fine," as were its assets. The assertion was undercut a day later when Bankman-Fried and Binance CEO Changpeng Zhao announced Binance had signed a non-binding letter of intent to acquire the company.

A Justice Department spokesperson declined to comment.

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Nikhilesh De is CoinDesk's managing editor for global policy and regulation. He owns marginal amounts of bitcoin and ether.

CoinDesk - Unknown

Nikhilesh De is CoinDesk's managing editor for global policy and regulation. He owns marginal amounts of bitcoin and ether.