US financial watchdog plans official hearing on FTX collapse
The U.S. House Financial Services Committee is planning to hold an official hearing on the FTX collapse to figure out the actual culprit behind the whole incident.
FTX was a popular second-ranked crypto exchange but 10 days ago, the exchange collapsed & also its backend company filed for bankruptcy under Chapter 11 in a US district court. In this situation, the exchange & its affiliated companies are under a very big hurdle because of the increasing demand for investigation & lawsuits against the backend team.
At present, Democratic Representative Maxine Waters of California and Republican Representative Patrick McHenry of North Carolina from the U.S. House Financial Services Committee are planning to hold a dedicated meeting about the liquidity issue & collapse of the crypto exchange FTX.
The main aim of the hearing will target the actual mistake that happened behind the FTX exchange operations and also they are looking to get real statements from their rival exchange Binance & former FTX CEO Sam Bankman-Fried (SBF).
The committee chairperson Waters shared this planning with an email to the Wall Street Journal (WSJ). Chairperson said:
“The fall of FTX has posed tremendous harm to over one million users, many of whom were everyday people who invested their hard-earned savings into the FTX cryptocurrency exchange, only to watch it all disappear within a matter of seconds.”
This hearing is expected to be held in December of this year and it is expected that the hearing & results of this case will result in better outcomes for the regulators to design revised regulatory policies on the crypto companies to ensure the safety of the investors.
Allegations on FTX exchange
Allegedly FTX founder & former CEO SBF handed over $10 billion worth of funds from FTX exchange to Alameda Research.
However, Alameda Research is an affiliated company of FTX but still the transactions of funds from FTX to Alameda Research was not legal because that was the user’s deposit funds and the whole thing happened in a dark room without informing other officials of this exchange.
Read also: Crypto exchanges suspend USDC & USDT on the Solana network
