US Congress to Investigate Binance’s Role in FTX Collapse: Report
Binance, the leading digital asset exchange by average daily trading volume, is also under global regulatory scrutiny following the sudden collapse of cryptocurrency exchange FTX and its subsidiaries. While speaking to reporters, Republican Patrick McHenry, the top House Republican, confirmed that Binance’s role in the collapse of FTX is under scrutiny by Congress. Binance CEO Changpeng Zhao aka CZ, however, has come out and strongly denied that he played a role in the fall of FTX, explaining that his exchange is a victim of the situation.
As stated by Republican Patrick McHenry, talking to the blockBinance’s involvement in the collapse of FTX will be discussed at a hearing in December.
Binance, meanwhile, has been arguing that the cause of FTX’s downfall was ‘financial impropriety and possible fraud’. in written comments to a UK parliamentary committee. Notably, their UK counterparts want to know what role Binance played in FTX’s downfall.
While the collapse of major cryptocurrency exchanges is not news in the industry, the failure of FTX has hurt regulators around the world. In addition, FTX was legally regulated with an operating license in several jurisdictions, including Australia, the US, and Singapore, among others. As such, millions of people around the world have been psychologically affected by the sudden collapse of FTX and Alameda.
The mystery surrounding Sam Bankman-Fried widens after a digital asset worth Rs. 3,653 crore of FTX customers disappeared hours before the company filed for chapter 11 bankruptcy.
McHenry also told The Block that the collapse of FTX has accelerated the need for centralized regulation of exchanges and the digital economy.
“We’ve had these conversations about what I think are the second, third, and fourth decisions we need to make as a committee to clarify,” McHenry said. And that means making a clear legal distinction here,” McHenry said.
