Canadian anchorman and entrepreneur Kevin O’Leary, in the presence of the Senate Committee on Banking, Housing and Urban Affairs, accused the world’s largest exchange, Binance, of being instrumental in the collapse of FTX and in the problems generated cascading over other companies in the crypto world also adding that being almost a monopoly, the platform should be regulated more stringently.
As evidence that more regulation leads to less risk the test cited the FTX-owned derivatives trading platform LedgerX (regulated by the Commodity Futures Trading Commission), which according to O’Leary is “the only entity that did not go to zero after the crash.”
Senator Cynthia Lummis also testified at the hearing expressing that it was time to:
“separate digital assets from corrupt organizations. FTX is good old fashioned fraud. Poor management, people failing, inadequate controls is what is on trial. We need to regulate this business and add digital assets to our existing financial framework.”
During the hearing, “Crypto Crash: “Why the FTX Bubble Burst and the Harm to Consumers,” which saw the above people testify, it also emerged that the Canadian entrepreneur had invested large sums personally in FTX.
O’Leary stated:
“I have an opinion, not the documents. One knocked out the other, intentionally. Binance, the world’s largest cryptocurrency exchange, played an early role in the collapse of mega-exchange FTX last month. Binance CEO Changpeng “CZ” Zhao announced that he would sell FTX’s native token exchange holdings, a move that triggered a liquidity crunch. Days later, FTX filed for bankruptcy. The exchange’s failure destroyed the cryptocurrency market, including several companies with exposure to the giant.”
Summary
Binance and its role in the collapse of FTX
The Wall Street Journal pulls off a new coup and manages to get its hands on documents showing that Ryan Salame, president of FTX, had brought to the attention of Bahamian authorities that FTX was using customer funds to settle Alameda Research‘s losses.
On 9 November, Bahamas Securities Commission Executive Director Christina Rolle made a request for an urgent investigation to the Commissioner of the Royal Bahamas Police Force.
The test had told Rolle among other things, how this was all possible because of information in her possession:
“customer assets that may have been held at FTX Digital were transferred to Alameda Research and such transfers were not permitted and therefore could constitute embezzlement, theft, fraud or some other crime.”
Salame specified that transferring user funds from FTX to Alameda required codes and passwords that were in the possession of only three people, CEO Sam Bankman-Fried, director of engineering Nishad Singh, and FTX co-founder Gary Wang.
SBF, was arrested in recent days following an extradition request by US authorities.
Sam Bankman-Fried was expected on the witness stand for today’s hearing but had said he would not be present although he had given availability for the House hearing even though he believed they would greet his words with disappointment.
An American-style “hands clean”
SBF had sent donations to almost all of Joe Biden’s US Democratic Party candidates (including the president) amounting to 46.5 million US dollars in the months leading up to the collapse of the exchange platform.
The news was given by OpenSecrets.org, a nonprofit that also revealed that the donations placed FTX by absolute numbers as the second largest funder of American Dems just behind the ever-present George Soros.
In the meantime, the White House has made no statement and refuses to make any about whether it will return funds received from fraudulent practices to the detriment of millions of Americans that would have served purposes unknown at the time.
The government also chose to let officials involved in America’s “clean hands” off the hook about whether or not to return the sums.
White House Press Secretary Karine Jean-Pierre invoked the provisions of the Hatch Act of 1939 not to make any statements.
“I’m happy to say [that] over and over again, because we believe in the rule of law here.”
The official’s comment to the interviewer, adding to ask the Democratic National Committee.
The Hatch Act of 1939 was enacted under President Franklin Delano Roosevelt, and protects US executive employees from making statements of a political nature.
