U.S. House Committee To Hold Hearing On FTX Collapse

A hearing on the demise of the cryptocurrency exchange FTX is scheduled to take place in December by the U.S. House Financial Services Committee. The committee stated that it anticipates hearing from all parties, including Alameda Research, Binance, FTX, FTX ex-CEO Sam Bankman-Fried and other associated organizations and individuals.

U.S. House Keen To Know More

The committee’s chair and ranking member, Reps. Maxine Waters (D-Calif.) and Patrick McHenry (R-N.C.), said in a joint statement that the lawmakers would be interested in learning more about the demise of FTX and its broader ramifications for the cryptocurrency ecosystem.

Sam Bankman-Fried, the former CEO of FTX, as well as representatives from FTX, Alameda Research, and even Binance which briefly intended to acquire FTX, will testify before the committee.

Waters, in an official statement, said:

“Unfortunately, this event is just one out of many examples of cryptocurrency platforms that have collapsed just this past year, [I] know that we need legislative action to ensure that digital assets entities cannot operate in the shadows outside of robust federal oversight and clear rules of the road.”

In his own statement, which referred to FTX’s collapse as a “debacle,” McHenry emphasized the necessity for the committee to know what transpired for FTX’s customers and the American people while pointing to Congress’s function in oversight.

Read More: BlockFi Preps For Potential Bankruptcy After FTX Collapse

FTX Filing For Bankruptcy

More than 100,000 creditors are currently involved in FTX’s bankruptcy proceedings, the majority of which are trading clients whose funds are currently frozen. To make matters worse, a hack of FTX’s operational wallets on November 12 resulted in the theft of $477 million worth of cryptocurrency that was still on the exchange.

Read More: Kraken’s CSO Claims To Have Identified FTX Hacker

According to the reports, FTX financed Alameda Research, its affiliated trading firm, billions of dollars worth of customer assets to finance risky trades, paving the way for its sudden collapse.

Several federal and state officials are looking into FTX right now.

Pratik has been a crypto evangelist since 2016 & been through almost all that crypto has to offer. Be it the ICO boom, bear markets of 2018, Bitcoin halving to till now – he has seen it all.

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