Legislation

House Panel to Hold Hearing on Crypto Exchange FTX Collapse

Lawmakers plan to investigate the failure of FTX, the large crypto exchange that collapsed last week and filed for bankruptcy protection, leaving investors and customers staring at losses that could total in the billions of dollars, the Washington Post reported. The House Financial Services Committee said Wednesday that it expects to hear from Sam Bankman-Fried, the 30-year-old founder and former CEO of FTX, who was previously hailed as a hero in the crypto community but now faces potential civil and criminal charges related to FTX’s collapse. The panel also expects to get testimony from FTX representatives, other crypto exchanges including Binance, Bankman-Fried’s hedge fund, Alameda Research, and others at a December hearing. “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,” committee chairperson Rep. Maxine Waters (D-CA) said in an emailed statement. FTX filed for bankruptcy protection Friday, sending shockwaves through the cryptocurrency industry, which has seen an enormous amount of volatility this year, including a sharp decline in the price of bitcoin and other digital assets. But the sheer size of FTX’s collapse highlights the massive market risks inherent in the growing crypto industry. Billions of dollars of wealth may have been destroyed in a few days. The circumstances have prompted investigations by the Justice Department and Securities and Exchange Commission. “We must get to the bottom of this for FTX’s customers and the American people,” ranking member Rep. Patrick McHenry (R-N.C.) said. “It’s essential that we hold bad actors accountable so responsible players can harness technology to build a more inclusive financial system.”
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