US Senator Ron Wyden (D-Ore) has requested financial data from top crypto exchanges such as Binance, Kraken, KuCoin, Bitfinex, and Gemini. Senator Wyden is also the leader of the tax-focused Senate Finance Committee.
The senator demanded more information from the firms regarding how they handle consumer money and assets. Additionally, Wyden asked for the companies’ balance sheets and demanded an explanation of their plans in the case of a disaster, such as bankruptcy.
Wyden cited a wide range of federal rules that frequently do not protect people who buy cryptocurrencies. However, the rules do cover people who invest in registered. FTX, one of the largest crypto exchanges, was criticized for its “outrageous mismanagement” in light of this mismatch. Binance, the world’s largest exchange was quick to call for exchanges to publish their proof-of-reserves.
Sen. Wyden stated,
“If these protections had been in place before the failure of FTX, far fewer retail investors would be facing precipitous financial harm today.”
Wyden’s letters were published as the broader cryptocurrency community continued to be shaken by the FTX implosion. The latest victim was BlockFi, a cryptocurrency lender which declared bankruptcy. BlockFi disclosed that it had more than 100,000 debtors.
Binance founder Changpeng Zhao (CZ) has revealed that his firm would allocate emergency funds for similar situations in the future.
The FTX collapse has shaken the crypto industry, with many exiting the space. Consequently, the prices of major currencies were drastically affected. Bitcoin (BTC), the original crypto, is struggling to stay above the $16k level. Meanwhile, Ethereum (ETH), the second largest crypto by market cap, is hovering above the $1.2k mark.
The growing repercussions sparked ongoing congressional inquiry after years of politicians ignoring the cryptocurrency sector. During the same time frame, crypto billionaires, including FTX founder Sam Bankman-Fried and his employees, donated a growing amount of money to Democrats’ and Republicans’ campaigns.
At press time, the global crypto market cap stood at $873 billion, up by 2.2% in the last 24 hours.