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- The Joe Biden government is preparing a draft to regulate crypto assets.
- According to the CFTC chairman LedgerX was the best entity compared to other FTX entities.
- LedgerX held more cash than other FTX debtor companies.
Ever since FTX filed for bankruptcy, the Securities and Exchange Commission (SEC) and other regulators are investigating the exchange, including regulatory authorities in the Bahamas, Turkey’s Financial Crimes Investigation Agency and other United States federal authorities. To unearth the mess that led to the sudden collapse of the FTX exchange, the US House Financial Services Committee is holding a hearing on December 13, and the next court hearing will be on December 16.
According to The Coin Republic, Sam Bankmman-Fried of Alameda purchased FTT tokens at a very low price. The entity waited a long time to increase the price of FTT tokens. After some days, Alameda started borrowing “real money” using these highly leveraged FTT tokens as collateral.
In the wake of the recent FTX collapse, United States lawmakers have expedited the proess drafting new regulations on crypto assets. The White House is keen on making changes to crypto regulations to avoid another disaster in the crypto market.
Recently, Rostin Behnam, the chairman of the Commodity Futures Trading Commission (CFTC), stated that FTX Group’s LedgerX was an example of how regulating the crypto sector would protect United States crypto consumers.
The chairman of CFTC stated, “many public reports indicate that segregation and customer security failures at the bankrupt FTX entities resulted in huge amounts of FTX customer funds being misappropriated by Almeda for its proprietary trading. But the customer property at LedgerX, the CFTC regulated entity, has remained exactly where it should be, segregated and secure. This is regulation working.”
Behman further added, “the limitations of our authority stopped at LedgerX. For those reasons that we are walled off from going past the regulated entity, the other FTX entities were not able to pierce through LedgerX and potentially take customer money, which obviously, as a regulator, is the priority.”
US Senators On Crypto Regulations
The US Treasury Secretary, Janet Yellen, officially stated that the country needs rigid regulations on the crypto industry. Lawmakers have seconded Janet Yellen’s statement; many believe it s time to design and implement new regulations for cryptocurrency.
“The recent failure of a major cryptocurrency exchange and the unfortunate impact that has resulted for holders and investors of crypto assets demonstrate the need for more effective oversight of cryptocurrency markets,” Secretary Yellen added further.
Sherrod Brown, Chairman of the Senate Banking Committee, stated, “It is crucial that our financial watchdogs look into what led to FTX’s collapse so we can fully understand the misconduct and abuses that took place. I will continue to work with them to hold bad actors in crypto markets accountable.”
Steve Anderson is an Australian crypto enthusiast. He is a specialist in management and trading for over 5 years. Steve has worked as a crypto trader, he loves learning about decentralisation, understanding the true potential of the blockchain.
