The US House Committee is preparing for a hearing on the collapse of FTX. The meeting will include topics on cryptocurrencies and regulations.
US wants to learn more about bankruptcy from FTX
The House of Representatives Financial Services Committee plans to seek information from FTX and related entities. The meeting will take place in December. Besides FTX, it will be on the agenda in the topics of crypto money regulations. Currently, the committee is gathering information from all parties, including Alameda Research, Binance, FTX and its former CEO, Sam Bankman-Fried, and other relevant organizations and individuals.
#NEW: Republican Leader @PatrickMcHenry and Chairwoman @RepMaxineWaters announce a hearing to investigate the collapse of FTX.
Read more: https://t.co/0UnDiFNHWB
— Financial Services GOP (@FinancialCmte) November 16, 2022
Binance representatives will also testify
Members of the committee said lawmakers would be interested in learning more about FTX’s bankruptcy and its consequences. Members state that this meeting will be in the interest of the cryptocurrency ecosystem. In November, FTX and its affiliated companies faced a liquidity crisis when their stock exchange reserves were disclosed. Now, along with former CEO Sam Bankman-Fried, Binance representatives intending to buy FTX will testify before parliament. Committee member Maxine Waters said in an official statement:
Unfortunately, this event is just one of many examples of cryptocurrency platforms crashing in the past year. I know we need legislation to ensure that cryptocurrencies cannot operate in the shadows except with solid federal oversight and clarity.
Maxine Waters is a politician who has served as the U.S. representative for California’s 43rd congressional district since 1991. She previously played an active role in the preparations for stablecoin legislation. The committee member calls the FTX bankruptcy “a fiasco,” which led to a 5% drop in the cryptocurrency market. In her statements, she stressed that while pointing to the regulatory actions of Congress, FTX needs to know what’s going on for its customers.
Cryptocurrencies lose their credibility with the bankruptcy of FTX
FTX’s bankruptcy proceedings currently involve more than 100,000 creditors. Most of them are corporate clients with frozen funds. Worse still, on November 12, when FTX’s operational wallets were hacked, $477 million in cryptocurrencies were stolen from the exchange. According to reports, FTX paved the way for its sudden collapse by providing billions of dollars worth of client assets to its sister company, Alameda Research, to finance risky transactions. Several federal and state representatives are now investigating FTX.
cryptocoin.com In this article, we discussed what happened in the FTX bankruptcy. Former CEO SBF stated in his latest statements that he wanted to “raise liquidity”.
