Home » House panel to hold hearing on crypto exchange FTX collapse | Business

House panel to hold hearing on crypto exchange FTX collapse | Business

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WASHINGTON (AP) — Lawmakers plan to investigate the failure of FTX, a massive cryptocurrency exchange that filed for bankruptcy protection after it filed for bankruptcy protection last week, with investors and customers totaling billions. We are facing losses that can go up to the dollar.

The House Financial Services Committee said Wednesday it expects to hear from 30-year-old FTX founder and former CEO Sam Bankman-Fried in connection with the collapse of FTX.

The panel also expects to get testimony from other crypto exchanges, including FTX representatives, Binance, Bankman-Fried’s hedge fund, Alameda Research, and others, at the December hearing.

“The FTX collapse took a toll on more than a million users, many of them everyday people who invested their hard-earned savings into the FTX cryptocurrency exchange, but in a matter of seconds. Everything is gone,” said committee chair Rep. Maxine Waters (D-CA) in an emailed statement.

FTX filed for bankruptcy protection on Friday, shocking the cryptocurrency industry with extreme volatility this year, including a sharp drop in the price of Bitcoin and other digital assets.

However, the sheer scale of the FTX bankruptcy highlights the enormous market risk inherent in the growing cryptocurrency industry. Billions of dollars of wealth could have been destroyed in a matter of days. The situation prompted investigations by the Department of Justice and the Securities and Exchange Commission.

“For FTX customers and the American people, we must get to the bottom of this issue,” said Ranking Member Rep. Patrick McHenry, RN.C. “It is imperative to hold the bad guys accountable so that responsible players can use technology to build a more inclusive financial system.”

Bankman-Fried previously testified before Congress, saying cryptocurrency companies need to address the risks posed by digital assets during a Senate Agriculture Committee hearing in February on the risks posed by digital assets. As a result, you put your client’s assets at risk. ”

March, President Joe Biden issued an executive order Direct Treasury Departments and other agencies to study the impact of cryptocurrencies on financial stability and national security.

Treasury Secretary Janet Yellen has said at several hearings on The Hill this year that more government regulation is needed to monitor the proliferation of cryptocurrencies because of the risks they pose to financial markets. .

“Our regulatory framework should be designed to support responsible innovation, especially while managing risks that could disrupt the financial system and economy.” Yellen said in April.

New York-based AP reporter Ken Sweet contributed to this report.

Copyright 2022 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission.

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