In the latest crypto news, U.S. prosecutors in New York are looking into last week’s FTX’s collapse, which occurred after the cryptocurrency exchange filed for bankruptcy last week in response to a surge in customer withdrawals.
Officials Call For Investigation And Regulation
Senate Banking Committee Chairman Sherrod Brown has called for an investigation into FTX by federal watchdogs, while Massachusetts Democrat Elizabeth Warren has called for tighter enforcement of crypto industry rules, stating, “The implosion of FTX must be a wake-up call for Congress and financial regulators to hold this industry and its executives accountable. Too much of the crypto industry is smoke and mirrors. It’s time for stronger rules and stronger enforcement to protect ordinary people.”
However, with both chambers of Congress almost evenly divided following the Midterm elections, the path forward for stronger crypto regulations remains hazy.
Now, the Securities and Exchange Commission (SEC), Justice Department, and Commodity Futures Trading Commission are all looking into how FTX handled customer funds as Alameda Research, the FTX-founded hedge fund, unraveled. It was recently revealed that FTX had been in an apparent liquidity crisis after using customer funds to prop up Alameda Research.
Bankman-Fried met with regulators and lawmakers on a regular basis, providing input on how the crypto industry should be regulated. He was an outspoken supporter of one bill, in particular, the bipartisan Digital Commodities Consumer Protection Act (DCCPA), which is still in the works and is co-sponsored by Senate Agriculture Committee Chairwoman Sen. Debbie Stabenow and ranking member Sen. John Boozman.
Sam Bankman-Fried was a major political donor and influential figure in Washington until last week when he gave $5.2 million to U.S. President Joe Biden’s presidential campaign and spent another $40 million supporting primarily Democratic candidates ahead of the November midterm elections.
Prior to last week, some lawmakers and regulators believed that FTX cofounder and political donor Sam Bankman-Fried was one of the few adults in the volatile crypto industry. After the events that partook last week, they can’t get away from him fast enough now.
SBF And Bahamas Authorities
Given that exchange is registered in the Bahamas, Bankman-Fried was also interrogated by Bahamian regulators and police on Saturday, as the country’s authorities investigated whether there was any criminal activity in the FTX collapse.
The inquiries from Bahamian authorities add to the mounting legal pressure that Bankman-Fried has been subjected to since his FTX empire collapsed last week.
More than 130 entities associated with FTX.com, FTX US, and trading firm Alameda Research were listed in bankruptcy filings in Delaware federal court on Friday. As part of the filing, Bankman-Fried resigned from his position as CEO of FTX Group.
Read more on the FTX-Binance crypto news:
Tether freezes $46 Million FTX-held USDT On Behalf of Law Enforcement
Binance Backpedals On FTX Buyout Deal
Crypto Companies Scramble To Deny Ties To FTX And Alameda Research
Binance CEO Unveils Plans For FTX Acquisition