The FTX turbulence destroy the clerk of the speaker of Crypto in Washington
The FTX turbulence destroy the clerk of the speaker of Crypto in Washington
In less than four years, Sam Bankman-Fried rose from the founding of the FTX crypto tour to the disassembled DE-FACTO spokesman for the industry in Washington. In less than a week, the Crypto politician whispered through the collapse of his empire and the disappearance of his influence on the Capitol Hill.
Bankman-Fried’s FTX-and the sister trade company Alameda Research-were considered a rare oasis of stability in an otherwise fluctuating cryptom market until this week. In a summer of market turbulence, the boss, who is colloquially known as "SBF", built up stature by getting wrapped crypto companies such as the Blockfi credit platform.
But this week a liquidity crisis recorded the Bankman-Fried own companies, which prompted the CEO of the arch-rival Binance to announce that his stock exchange would take over FTX.com. The deal - which was subjected to a Due Diligence - dissolved a day later. Bankman-Fried desperately searched for a rescuer, while supervisory examinations were whirling around his business.
in Washington, Bankman-Fried had testified to mighty congress committees, publicly supported crypto legislation and developed into an important political donor. The fall of the most prominent American spokesman for Crypto would affect more than just FTX; It could make the situation difficult for an industry that has excited the anger of political decision -makers for years.
"If you don't sit at the table, you are on the menu," said Charley Cooper, Managing Director at R3, a blockchain company. "I would suggest that members of the crypto community who realize how bad this looks for the industry should make every effort to get in touch with political decision-makers."
crypto executives fear that the problems of FTX will be tightened. Perianne Boring, founder and managing director of the crypto lobby group Chamber of Digital Commerce, warned of possible regulatory measures because "political decision-makers have the feeling that they have to react to market shocks".
shherrod Brown, a democratic senator from Ohio and chairman of the Senate Banking Committee, said in a explanation that the collapse of FTX was "a loud warning bell" and that the "continued turbulence on the cryptoma market is that we have to think carefully about how we can regulate cryptocurrencies in our Economy ".
"This is a very networked world," Gary Gensler, chairman of the US IPO supervisory authority Securities and Exchange Commission, told CNBC on Thursday. A crypto player had "toxic combinations of a lack of disclosure, customer money, a lot of leverage-i.e. borrowing-and trying to invest with it". The SEC examines FTX, including the credit products of the platform and the management of customer money.
"I do not expect legislation to move this year," said Kristin Smith, managing director of the Blockchain Association, a lobby group. "I think the legislators want to incorporate everything they have learned from this recent incident."
BOOZMAN said in an explanation that the senators "take a look from above to the bottom to ensure [The Bill] creates the necessary safety precautions that the market for digital raw materials urgently needed", and added that the events of this week "underline the clear need for a stronger federal supervision over the industry of digital assets.
The problems of FTX have also raised questions about the role of Bankman-Fried as a political donor. Before the snacks this week, he was the second largest donor for the Democrats with $ 36 million.
Binance led "alleged investigations by the US authority" as one of the reasons for the task of his FTX Buyout. In addition to the SEC examination, the CFTC and the US Ministry of Justice also examined the platform, reported Bloomberg. The agencies rejected a statement, while FTX did not answer inquiries about comments on inquiries.
ftx also proposed significant regulatory reforms that have been checked by the CFTC. The company wanted to automate risk management functions in futures markets that are normally carried out by brokers. The CFTC rejected it to comment on the FTX application, but crypto experts argue that every project in which the company is involved is likely to be put on hold.
Bankman-Fried conflict in Washington this week. Last month, the FTX boss proposed a number of standards for the industry, including regulatory supervision, consumer protection and "reliable address lists in connection with illegal financing".
His suggestions triggered a counter reaction among many crypto believers, with some critics accused of prioritizing the interests of his own company in front of the industry. Some crypto lobby groups argue that the legislative template he supported for digital raw materials, large exchanges such as FTX benefited more than decentralized finances or defi.
"When he suggested his ideas for cryptor regulations last month, it sounded as if he were trying to take the FTX business plan and make the congress to codify him as the country's law," said Jim Bianco, President and co-founder of Macro Research Companies Bianco Research.
Despite the criticism, Bankman-Fried managed to beat a bridge between the government and a sector that is often skeptical about regulatory supervision. Its difficulties open the door to a new face of cryptography in order to take the corridors of power in Washington, which indicates that the already difficult relationship in the industry could deteriorate to political decision -makers.
"SBF has made much more concerted efforts to work within established norms and institutions in Washington than someone else in the crypto area that I can imagine," said a person who is familiar with Bankman-Frieds Communication in the US capital.
Additional reporting by Caitlin Gilbert, James Politi and Lauren Fedor
Source: Financial Times