Binance, the leading digital asset exchange by average daily trading volume, is also coming under global regulatory scrutiny following the sudden collapse of crypto exchange FTX and its subsidiaries. While speaking to reporters, Patrick McHenry, a senior Republican of the Republican Party, confirmed that Binance’s role in FTX’s demise is under close congressional scrutiny. However, Binance CEO Changpeng Zhao aka CZ spoke out and vehemently denied participating in the FTX crash, citing that his exchange was a victim of the situation. .
As stated by Republican Patrick McHenry, Talk to The BlockBinance’s involvement in the demise of FTX will be discussed at a hearing in December.
Meanwhile, Binance has time and again argued that the cause of the crash of FTX was ‘financial irregularities and the possibility of fraud’ in the written comments for a UK parliamentary committee. Notably, UK partners want to know what role Binance plays in FTX collapsed.
While the collapse of a major crypto exchange is not news in the industry, the failure of FTX has reassured regulators around the world. Moreover, FTX is legally regulated through licenses to operate in several jurisdictions, including Australia, the United States and Singapore, among others. As such, millions of people globally have been psychologically affected by the sudden collapse of FTX and Alameda.
The mystery surrounding Sam Bankman-Fried escalated after $450 million (approximately Rs.3,653) worth of digital assets belonging to FTX customers disappeared hours before the company filed for bankruptcy. according to chapter 11.
McHenry further told The Block that the collapse of FTX has fueled the need to regulate centralized exchanges and the digital economy.
“We had conversations about what I think are the second, third and fourth level decisions that we have to make as a committee to bring clarity,” McHenry said. “So I believe the first step here is for you to have clarity on what digital assets are. And that means making a clear legal distinction here,” McHenry said.
