- Senate Banking Committee to schedule a hearing regarding FTX collapse and CZ’s role in the meltdown.
- SBF is already under investigation by the DOJ, the SEC and the CFTC.
- The committee will also analyze the ripple effect of FTX’s collapse.
The infamous Sam Bankmen-Fried filed for chapter 11 bankruptcy on November 11. An official liquidator was appointed to liquidate all the assets, and he is facing charges for allegedly mishandling customers’ funds. The once white horse of the crypto world, sitting atop a $32 billion company, is now being chased down by authorities. And under investigation by the Department of Justice, the Securities and Exchange Commission, and the Commodities Futures Trading Commission.
After the recent political turmoil of midterm elections in the US, the dust has settled, and a key Senate Committee could hold a hearing to investigate the collapse of FTX. SBF can be called upon for a senate hearing.
According to a Democratic Committee spokesperson, “The Senate Banking Committee is working on scheduling a hearing, and details are forthcoming.” The House Financial Services Committee announced it would hold a hearing regarding FTXs collapse and Binance’s role in the fiasco. SBF and CZ may both be questioned extensively.
It is to be noted that CZ Changpeng Zhao, CEO of Binance, reportedly dumped their 23 million FTX token worth $584 million as a part of liquidation in the market. This started a chain of events where the price of FTT took a nosedive, followed by a series of withdrawals from customers creating a liquidity crunch for FTX. Then Binance came forward to acquire FTX and backed out in 24 hours; this led to insolvency, followed by bankruptcy filing on November 11, along with 134 associated companies. This caused the global crypto market to crash, and almost all major coins were down. And the event caused a contagion risk which is slowly engulfing the market.
A very interesting story, with nail-biting twists and revelation, causing the crypto market to lose trust and pushing back the entire industry 3-4 years behind.
A thorough inquiry is imminent to uncover the truth; therefore, the spokesperson said, “The SEC, DOJ and CFTC have announced inquiries into FTX’s bankruptcy, Sam Bankman-Fried’s misconduct. The Banking and Housing Committee’s role is to understand the cryptocurrency industry’s structure, as well as look into the broader issue of how cryptocurrency impacts customers, our markets and the economy, including the ripple effect of failures like FTX, Voyager and Celcius.”
Although it still needs to be made clear when the Senate Banking Committee will schedule the hearing and to whom the lawmakers may call to testify.