Senators Elizabeth Warren and Sheldon Whitehouse took action for various cryptocurrency platforms. Here are the details…
US senators take action for crypto platforms
US Senators have demanded that FTX’s failure be investigated. FTX may soon face further investigation. In a letter published today, Senators Warren and Whitehouse; He asked the US Department of Justice (DOJ) to “hold FTX’s directors fully accountable.” Senators noted that the once-leading crypto exchange filed for bankruptcy this month, along with at least 130 affiliated companies.
They also observed that the collapse of FTX had a ripple effect on the financial industry, noting that loan firms and hedge funds such as Genesis Capital and Galois Capital had millions of dollars locked in FTX, while crypto lending platform BlockFi suspended withdrawals in response to the stock market. Senators urged the DOJ to focus its investigation on how FTX is harming its customers.
They pointed out that FTX is uncontrolled and disorderly.
Warren and Whitehouse claimed that FTX was deceiving customers through advertising and celebrities, and that former FTX CEO Sam-Bankman Fried downplayed liquidity concerns when users realized they could no longer withdraw their funds shortly before the firm finally crashed. They continued, noting that current FTX CEO John Jay Ray highlighted many of FTX’s failings last week. Ray noted in public filings that FTX suffered from weak regulatory oversight, heavy administrative control among inexperienced leaders, and concealed misuse of client funds.
Warren and Whitehouse concluded that FTX’s downfall was not “a mere result of sloppy business and management practices” but “deliberate and fraudulent tactics used by [FTX executives] to enrich themselves.” The two senators said that FTX’s debt relief could total $8 billion, owed to a million customers, mainly working and middle-class individual investors.
Warren has previously commented on the crypto crash
This isn’t Warren’s first statement about the collapse of FTX. Along with his fellow Senator Dick Durbin, he sent a letter on November 16 urging FTX to provide information to regulators. Warren also published an article in the Wall Street Journal yesterday in which he described the collapse of FTX as a “wake-up call” for regulators, including the DOJ, the Securities and Exchange Commission, and the U.S. Treasury. Recent reports suggest that some of these agencies are already in the process of investigating FTX.
These cryptocurrencies are also in the focus of regulators
On the other hand, the International Organization of Securities Commissions (IOSCO), which coordinates the rules for G20 countries, is turning to stablecoins. He established a set of principles for a particular asset. In addition, platforms that make transactions related to stablecoins are now also in mind. Jean-Paul Servais, the new head of IOSCO, who is the head of worldwide regulators such as the US SEC and BaFin, called for an urgent regulation for cryptocurrencies. Regulators have not taken action so far, according to Servais. However, he said that this situation will change thanks to the crisis in FTX.
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