The FTX collapse and the political affiliations of former CEO Sam Bankman-Fried remain high on the agenda in the US. Also, the relationship between crypto companies and financial institutions after the FTX incident also raises concerns. U.S. Senator Elizabeth Warren sought clarification from Fed Chair Jerome Powell and top bank regulators. He gave the relevant persons until 21 December to respond to the requests.
Elizabeth Warren requests information on the FTX effect
The collapse of FTX, which dealt a heavy blow to the crypto money market, also affected the financial world due to connections. This naturally became a concern for banks with ties to crypto firms. Now, US Senator Elizabeth Warren is addressing this issue. Warren seeks an explanation from Federal Reserve Chairman Jerome Powell and other top bank regulators about the connections major lenders have with the crypto industry in the wake of FTX’s spectacular collapse.
Meanwhile, Elizabeth Warren and Tina Smith are also Democrat senators. However, they do not hesitate to go on this issue. To this end, he wants to learn how the Fed, the Office of the Currency Regulatory Authority and the Federal Deposit Insurance Corporation, “assesses the risks to banks and the banking system in relation to these links.” Warren and Smith say these connections may be deeper than previously thought. The two wrote letters to Powell, FDIC Acting Chairman Martin Gruenberg, and Acting Auditor Michael Hsu. In these letters, before moving on to the demands, they expressed the reasons for their concerns as follows:
We are writing to express our concerns about the recent exposure of ties between the banking industry and cryptocurrency firms.
Deadline for responses: 21 December
Warren, who represents Massachusetts, and Smith, of Minnesota, expressed their concerns, particularly with the disclosure of several banks’ ties to FTX and Alameda Research. Alameda is a trading company founded by Sam Bankman-Fried that played a leading role in the collapse of the empire. cryptocoin.comAs you follow, he is accused of using client funds at Bankman-Fried Alameda.
Senators asked regulators if they plan to conduct a broad review of crypto firms’ ties to the banking industry. They also asked for details on regulated banks currently engaged in crypto-related activities. They have given until December 21 for responses.
