What is taking place is: In the wake of the failure of FTX, the chairman of the Senate Finance Committee, Ron Wyden, has issued a demand that cryptocurrency exchanges such as Binance.US, Coinbase, and others turn over information regarding their business activities.
On Monday, the Oregon Democrat wrote letters to six of the largest cryptocurrency exchanges with a series of questions regarding the companies’ organisational structures, balance sheets, real estate acquisitions, and other topics. Additional cryptocurrency exchanges that were contacted include Bitfinex, Gemini, Kraken, and KuCoin.
Important context: The letter arrives as Washington is scrambling to come up with a response to the FTX fiasco, which revealed the once-third-largest cryptocurrency exchange to be nothing more than a house of cards. The Chair of the Commodity Futures Trading Commission (CFTC), Rostin Behnam, is scheduled to appear before the Senate Agriculture Committee on Thursday in order to provide testimony during the first hearing on the matter. The hearing that will be held on December 13 will be held by the House Financial Services Committee.
Wyden, who has a history as an ally of the industry, informed the companies that he is focused on “the clear need for consumer protections along the lines of assurances that have long existed for customers of banks, credit unions, and securities brokers.” Wyden has a history of being an ally of the industry.
“Unfortunately, customers who entrusted FTX with their crypto funds have no such protections,” Wyden wrote. “[T]hese consumers have no recourse.” If these safeguards had been in place before to the fall of FTX, a significantly less number of ordinary investors would be experiencing dramatic financial devastation right now.
This is what they have to say: In a statement, a spokesperson for Coinbase said that the company already discloses its “operational and legal protections for customer assets, as well as our audited financials,” and that the company is looking forward to providing a response to Wyden’s letter. Coinbase is a publicly traded company with its headquarters in the United States.
Requests for comment that were made to Binance.US, Bitfinex, Gemini, Kraken, and KuCoin were not immediately met with a response.
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