Federal prosecutors are investigating whether FTX’s founder, Sam Bankman-Fried, manipulated the market for two cryptocurrencies this past spring, leading to their collapse and creating a domino effect that eventually caused the implosion of his own cryptocurrency exchange last month, according to two people with knowledge of the matter.

U.S. prosecutors in Manhattan are examining the possibility that Mr. Bankman-Fried steered the prices of two interlinked currencies, TerraUSD and Luna, to benefit the entities he controlled, including FTX and Alameda Research, a hedge fund he co-founded and owned, the people said.

The investigation is in its early stages, and it is not clear whether prosecutors have determined any wrongdoing by Mr. Bankman-Fried, or when they began looking at the TerraUSD and Luna trades. The matter is part of a broadening inquiry into the collapse of Mr. Bankman-Fried’s Bahamas-based cryptocurrency empire, and the potential misappropriation of billions of dollars in customer funds.

Federal prosecutors and the Securities and Exchange Commission have been examining whether FTX broke the law by transferring its customer funds to Alameda. Last month, a run on deposits exposed an $8 billion hole in the exchange’s accounts, causing the company to collapse. Mr. Bankman-Fried stepped down as FTX’s chief executive when the company filed for bankruptcy on Nov. 11.

FTX is also under investigation for violating U.S. money-laundering laws that require money transfer businesses to know who their customers are and flag any potentially illegal activity to law enforcement authorities, three people familiar with the investigation said. That investigation, first reported by Bloomberg News, began several months before the bankruptcy of FTX. Investigators are also looking into the activities of other offshore cryptocurrency trading platforms.

In a statement, Mr. Bankman Fried said he was “not aware of any market manipulation and certainly never intended to engage in market manipulation.”

• Thanks for reading The Times.

“To the best of my knowledge, all transactions were for investment or for hedging,” he added.

Representatives of the U.S. attorney for the Southern District of New York declined to comment. Representatives of FTX did not immediately respond to requests for comment.

The focus on possible market manipulation adds to the legal storm brewing around Mr. Bankman-Fried. It is illegal for an individual to knowingly stage market activity designed to move the price of an asset up or down.

TerraUSD was a so-called stablecoin, but unlike other stablecoins, its value wasn’t backed directly by the U.S. dollar. Rather, it maintained its value from a second coin called Luna through a complex set of algorithms. Traders within the digital ecosystem could mint these coins, the prices of which would fluctuate based on how many were in circulation. Anytime the price of TerraUSD fell, the supply of Luna would increase, as traders created more Luna to try to capitalize on the difference.

Editors’ Picks

They Invest in the Land to Build the Future

What We Learned From ‘Harry and Meghan,’ the Netflix Series

How Can I Stop Children From Bringing Toy Guns to the Playground?

In May, major cryptocurrency market makers — exchanges or individuals who arrange for buyers and sellers to be matched — noticed a flood of “sell” orders coming in for TerraUSD, said one person with knowledge of the market activity. The orders were in small denominations, but they were placed very quickly, the person said.

The sudden jump in sell orders for TerraUSD overwhelmed the system, making it hard to find matching “buy” orders for them. Under normal conditions, any sell orders that remained unfulfilled for too long would be matched with buy orders at a lower price. The longer the orders lingered without being matched, the more they forced down the price of TerraUSD and caused a corresponding drop in Luna prices because of the way the two coins were linked.

The exact causes of the collapse of the two cryptocurrencies remain unclear. However, the bulk of the sell orders for TerraUSD appeared to be coming from one place: Sam Bankman-Fried’s cryptocurrency trading firm, which also placed a big bet on the price of Luna falling, according to the person with knowledge of the market activity.

Had the trade gone as expected, the price declines in Luna could have yielded a fat profit. Instead, the bottom fell out of the entire TerraUSD-Luna ecosystem. The collapse caused more trouble in the cryptocurrency industry, sending several prominent companies into bankruptcy and erasing about $1 trillion in value from the crypto market.

The ripple effects from the Luna crash ultimately contributed to the collapse of Mr. Bankman-Fried’s business empire. In November, Caroline Ellison, the chief executive of Alameda, told staff that loans to Alameda were recalled as a result of the market chaos unleashed by the crash, according to a person familiar with the matter. But the funds that Alameda had borrowed were no longer easily available, Ms. Ellison told the staff, so the company used FTX customer funds to make the payments.

An attorney for Ms. Ellison did not return requests for comment.