After the FTX mess, the US Senate is questioning the biggest cryptocurrency exchanges Binance and Coinbase. Ron Wyden, chairman of the Senate Finance Committee, has sent letters to crypto companies demanding answers about their consumer protection practices.
Questions on Wyden to exchanges including Binance and Coinbase
The widespread damage caused by the fall of FTX turned the spotlight to other cryptocurrency exchanges. Ron Wyden, chairman of the US Senate Finance Committee, requested information from Binance US and Coinbase about how they protect investors who use their services. Accordingly, Wyde sent letters with questions to targeted crypto companies this week.
Senator Ron Wyden has sent letters to the CEOs of leading crypto companies, including Bitfinex, Gemini, Kraken, and KuCoin, asking them to explain their structure, whether they separate clients’ assets from their own, and how they protect against market manipulation and internal conflicts of interest. Wyden highlighted the following in the letters:
Congress is considering much-needed regulation for the crypto industry. In this context, I will focus on the clear need for consumer protections in line with long-standing safeguards for clients of banks, credit unions, and securities brokers. If these protections had been in place prior to the failure of FTX, far fewer individual investors would face serious financial losses today.
FTX collapse is a milestone for cryptocurrency regulation
The letters, dated November 28, seek disclosures, including balance sheet information and whether the companies’ reserves have been audited. Companies, mostly private and a few located in offshore countries, are unlikely to provide detailed financial data. However, the requests underscore the possible approach of Democratic lawmakers to the industry. Because the next session of Congress will start in about a month.
Meanwhile, Senator Elizabeth Warren, Sheldon Whitehouse, and Richard Durbin have already started investigating FTX. Moreover, they called for those responsible to be held accountable for their role in the collapse of the cryptocurrency exchange.
Wyden’s committee is not at the center of some of the central regulatory questions facing the industry in the US. However, it is possible that its jurisdiction in tax matters can play an important role. By the way, as you follow on Kriptokoin.com, the Oregon senator has criticized crypto miners before. However, it also pushed for crypto-friendly changes in the 2021 infrastructure bill that shook the industry.
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