Federal prosecutors are investigating whether Sam Bankman-Fried and his hedge fund orchestrated trades in a way that led to the collapse of two cryptocurrencies in May.

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.