The Commodity Futures Trading Commission, the regulator leading the investigation, traced nearly all the money to banks, MF Global's trading partners and the firm's securities customers. The Commission, however, is unsure whether the money can be retrieved, the paper said.

"We understand the frustration of customers, but the CFTC must take the necessary time -- however long it takes -- to get to the bottom of what happened at MF Global and take appropriate actions," the regulator said in a statement to the paper.

In December, Reuters reported U.S. regulators were "far enough along the trail" that they know where the money went, but must sort out which transactions were legitimate before more money can be released to customers.

MF Global filed for bankruptcy on October 31 after investors and customers became rattled over its $6.3 billion bet on European sovereign debt.

(Reporting by Sruthi Ramakrishnan in Bangalore; Editing by Dan Lalor)

• A Permanent Economic Emergency