Global regulators are circling Sam Bankman-Fried's FTX exchange

Global regulators are closing in on embattled crypto exchange FTX as fallout spreads across digital asset markets, with founder Sam Bankman-Fried making a final attempt to raise up to $8 billion in fresh funding.

Authorities in Japan, Australia and the Bahamas, where FTX is based, have all taken action as fears grow that customers at one of the world's largest digital asset trading venues could suffer severe losses.

The regulators' crackdown is the latest blow to Bankman-Fried's crypto empire, which was valued at $32 billion just months ago. Its troubles have hit big-name investors, including Japan's SoftBank, which plans to write down its $100 million investment in the group, a person familiar with the matter said on Friday.

The Bahamas' market watchdog stepped in late Thursday to freeze assets of FTX Digital Markets, the local subsidiary that serves as the exchange's primary service provider.

"The Commission is aware of public statements suggesting that clients' assets were mishandled [and/or] mismanaged. . . Such actions would have been contrary to normal corporate governance, without the client's consent and potentially unlawful," the Commission said.

Just hours later, Japanese financial authorities moved to indefinitely suspend some local operations of FTX's main international platform, citing concerns about the exchange's structure and creditworthiness, while FTX's Australian operations were placed into administration and its customers were advised not to deposit or earn money from trades.

Wall Street regulator US Securities and Exchange Commission has expanded an investigation into FTX in recent days, which includes examining FTX's crypto lending products as well as its management of customer funds, according to a person familiar with the matter.

"We are actively working on additional routes to provide payouts to... our user base. We are also actively exploring what we can and should do globally," FTX said.

The growing regulatory crackdown comes as Bankman-Fried has been engaged in frantic talks with investors, seeking $6 billion to $8 billion to plug the stock market's financial hole and stave off bankruptcy.

A subset of Bahamian customers and those using certain tokens have been able to begin withdrawing assets from the frozen exchange, but most customers remain on edge as the company's fate hangs in the balance.

The consequences of the crisis at FTX continue to impact the crypto markets. BlockFi, a crypto lender that was bailed out by Bankman-Fried after suffering losses in this spring's crypto crash, halted trading "given the lack of clarity" over FTX's fate.

The lender said it was in the dark about the status of FTX and sister trading firm Alameda's international and US exchanges and would halt customer withdrawals until the situation was resolved. “We, like the rest of the world, learned about this situation via Twitter,” BlockFi said.

Genesis, a major crypto trading firm, said its derivatives business had about $175 million stuck on the frozen exchange. The company said the funds were “not material to our business” and would not impact its market-making or trading functions.

The Bahamas Securities Commission said no assets of the local company could be transferred from FTX without the consent of a temporary liquidator appointed on Thursday.

FTX's Bahamas operation is referred to in the terms of service for FTX.com as the "service provider" for many of the exchange's activities, but the crypto exchange is controlled by an Antigua and Barbuda-based company, FTX Trading.

In Japan, the Kanto Local Finance Bureau, which oversees the operations of FTX and other crypto exchanges in the country, said in a statement that it would not allow the company to accept new assets from customers. Separately, Japan's Finance Minister Shunichi Suzuki told reporters that the government must do "everything possible" to protect the interests of FTX's Japanese customers.

FTX was among a small number of crypto exchanges that received operating licenses from Japanese financial authorities in 2017 as part of a plan at the time to establish a center for trustless crypto activities. FTX remains comparatively small in Japan compared to other exchanges.

Reports by Scott Chipolina and Joshua Oliver in London, Kana Inagaki and Leo Lewis in Tokyo, Nic Fildes in Sydney, William Langley in Hong Kong and Tabby Kinder in San Francisco