The largest crypto exchange, Binance, might be in deep trouble as they are under investigation by the US congress for their involvement in the collapse of FTX. Any form of action taken by Binance that could have contributed to the downfall of FTX and its subsidiary companies could soon be found by the authorities. This was informed by Patrick McHenry, a senior house republican.
Binance’s comments on this
The CEO, CZ Zhao, has been very straightforward about whether Binance was involved in the collapse of FTX, saying that the fallen platform was a victim of the situation that it put itself in. Patrick said that any form of involvement with FTX would be discussed and accessed in a hearing that is scheduled for December 2023.
It is also clear that a lot of things were going wrong at FTX, and therefore Binance does have a point when it says that the financial irregularities and fraud were the reason for the exchange’s collapse. In fact, the current CEO of the company John Ray said that the company’s finances were a mess and this is the worst bankruptcy he is handling. There are hardly any records that will help them backtrack transactions.
Regulators in trouble
After the collapse of FTX, it has become clear that the regulatory authorities are not doing enough justice to their work. The fall of the crypto exchange FTX has affected millions of users, and billions of dollars in customer wealth was also lost. Regulators are on the back foot now, and they must bring regulations that ensure such a thing doesn’t happen again. Patrick McHenry from the house of republicans also said that the collapse of FTX has accelerated the need for regulating crypto exchanges and boosting the digital economy.
He also gave the first step towards that, saying that clarity on what digital assets are is the most important thing. If that doesn’t happen, platforms and users will always stay confused about cryptocurrencies.
FTX collapse also shows why it is important to use hardware wallets instead of storing your crypto on exchanges. Do you think anything important would be discovered as Binance is under investigation for involvement in the FTX collapse? Let us know in the comments below. And, if you found our content informative, share it with your family and friends.