The lack of a central authority to notice suspicious transactions in many kinds of situations, the irreversibility of transactions, and the lack of knowledge among many consumers and investors make cryptocurrency a preferred platform for scammers. Blockchain data platform chainanalysis noted that “rug-pulls” accounted for 37% of cryptocurrency scams in 2021.
The United States regulators want to know why the FTX faced such a huge crash recently. On the basis of the sudden FTX downfall in the crypto market, US lawmakers are preparing a bill on regulating cryptocurrencies in the United States. The White House is taking steps in the crypto market to avoid a repeat of the FTX situation in the crypto market. The special panel was investigating the liquidity issues of FTX.
Raja Krishnamoorthi, chairman of the subcommittee on economic and consumer policy, sent a letter to the former and current CEOs of FTX, asking them to produce documents related to the exchange’s finances on December 1. He demanded the entity to produce information related to its finances, current crypto holdings, and balance sheets from before FTX filed for bankruptcy on November 11. Krishnamoorthy wants to know how the company will repay the users’ funds.
Krishnamoorthy said that “FTX’s customers, former employees, and the public deserve answers.” He further added to the subcommittee demand to “produce the documents with detailed information on the significant liquidity issues faced by FTX, the company’s abrupt decision to declare bankruptcy, and the potential impact of these actions on customers who used your exchanges.”
A Four-Page Letter Was Sent To Five Crypto Exchanges
Since 2021, more than $1 billion (USD) has been lost in crypto-related fraud. In addressing the issue, the House Committee of Congress sent a letter urging certain measures be taken to protect investors from frauds in the crypto industry.
Two months ago, the House Committee sent a four-page letter to five crypto exchanges. The committee sent a four-page letter to the five biggest crypto exchanges: Coinbase, FTX, Kraken, and Kucoin. The committee requested that these cryptos have to submit all the documents related to crypto fraud since 2009.
Is The SEC Planning To Launch An Investigation Into Former FTX CEO Funding Before The 2022 Midterm Elections?
US officials from both the Republican and Democratic parties felt guilty accepting millions of dollars from the former FTX CEO before the crypto crash happened on November 8 2022. Sam-Bankman Fried openly accepted the truth on social media platforms that he spent some of his profits on the election campaign that was held on November 8, 2022.
After George Soros, the former FTX CEO was the second-largest donor of funds to the Democrats. As per the reports, $57 million (USD) was given to Democratic candidates, and the remaining $22 million (USD) was given to Republican members. It is not the first time that FTX donated funds to elections; in the 2020 elections, SBF spent nearly $5.2 million (USD) on Joe Biden’s election campaigns in the US.
Nancy J. Allen is a crypto enthusiast and believes that cryptocurrencies inspire people to be their own banks and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning.
Source: https://www.thecoinrepublic.com/2022/11/19/former-and-current-ftx-ceos-received-a-letter-from-the-house-committee/