By George Ward
Maxine Waters, the Chairwoman of the United States House Committee of Financial Services, has released a statement in the wake of the FTX saga.
According to the press release, the Committee has slated a hearing in December on the FTX collapse. The hearing seeks to evaluate the reason for the collapse and the appropriate steps.
In the past two weeks, controversy has rocked the crypto market. First, FTX, one of the prominent crypto exchanges in the world, collapsed.
The fall began as the price of FTT, its native token, plummeted. In addition, Binance’s decision to liquidate all FTT tokens on its platform also fuelled massive withdrawals from FTX.
Consequently, this led to FTX filing for chapter 11 bankruptcy last week. In addition, Sam Bankman-Fried, the company’s CEO, had also stepped down following the saga.
Furthermore, reports emerged that FTX misused users’ assets, a rumor that Changpeng Zhao, Binance CEO, confirmed. Bankman-Fried used the assets to fund “shady deals” made by Alameda Research, a sister company to the FTX exchange.
Reports alleged that FTX lost over $8 billion to this crisis. This attracted comments and attention from countries like Bulgaria, Singapore, and the US.
However, the US House Committee on Financial Services wants to look into the recent saga. The Committee has set aside a day in December for the hearing.
According to reports, several big names in the crypto sector will be at the hearing. Among them are Binance CEO (CZ), Bankman-Fried, and Alameda Research CEO.
Why Is The Committee Evaluating The FTX Crisis?
Maxine Waters, Chairwoman of the Committee, said the investigation was necessary. Waters noted that the singular case affected the entire crypto industry and must be accessed.
“The FTX fall caused a ripple effect across the crypto ecosystem, affecting millions of users. Unfortunately, most of these users invested their hard-earned funds into the exchange to see everything fade away. Hence, we must look into the matter with utmost urgency,” the Chairwoman added.
Another member of the Committee, Patrick McHenry, also shares similar sentiments. He stated that regulatory oversight is a significant function of Congress.
Additionally, he argued that the Committee would evaluate the FTX crisis. This is because of the American people and FTX users who have lost their assets.
McHenry concluded by saying that it is essential for countries to prosecute bad actors. By so doing, other players in the market will sit up and follow laid down regulations.
However, McHenry insists that companies can adopt new technologies to develop a sound financial system.