Mint base, ripple CEOs blame sec for FTX user conflicts

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The FTX-Brouhaha has emphasized another problem with the US regulation: The uncertainty of the Securities and Exchange Commission (SEC) has forced the leading crypto exchanges to operate offshore, whereby customers are exposed to born business practices.

The crypto exchange FTX-at the center of the current turbulence in the industry-is examined from the SEC because of its 8-billion-dollar-hole in their balance sheet.

CEO Sam Bankman-Fried supposedly told investors on Wednesday that the company had to register bankruptcy if it does not receive financial injection. He hoped that the rival CEO Changpeng Zhao, founder of Binance, would be his white knight and save FTX from his "liquidity crisis", but the deal failed as quickly as the rescue was suggested.

"As a result of the entrepreneurial Due Diligence and the latest news reports on improperly treated customer funds and presumed investigations by the US authorities, we have decided that we will not continue the potential takeover of ftx.com," said Binance said .

Bankmann-Fried, hardly a billionaire in an ambitious deal of deals, while chaos took place on the cryptoma markets at the beginning of this year. He tried to save the battered lenders Celsius, Voyager and Blockfi, but a number of obvious losses finally led to FTX collapse.

he is now Search Global to meet FTX's payment requests and should " Explore all options . "

In a leaked Slack-Nachricht told Banksman-Fried, his top priority in front of everyone. He also claimed that FTX had spoken to the tron ​​founder Justin Sun about fundraising and pointed out to the possibility that a future deal FTX and his US subsidiary would bring together.

offshore exchanges are the hot destination for crypto retailers

In particular, the American subsidiary of FTX, FTX.US, resistance of the meltdown. All deposits are secured one-to-one with real money, to Bankman-Fried, in contrast to his global counterpart, more like a partial reserves seems to have worked.

In addition, regulations in the USA prevented the user based on buying the native FTT-TOKEN from FTX, who came under pressure after Binance had announced that he would be able to sell coinund, even more when the takeover failed.

This shielding by the regulatory authorities may have encouraged companies such as FTX to set up offshore exchanges, which effectively exposed to customer assets with high risk.

Before the explosion, the flagship-ftx platform processed a daily trading volume of around $ 2.6 billion. The offer regulated by the USA processed only $ 174 million, now to $ 100 million per Messari.

The same phenomenon happens on Binance, which comes from the Kaiman Islands. It processes around $ 18 billion a day, compared to $ 700 million on Binance.Us-a difference of 96 %.

originally based in Hong Kong, FTX moved his headquarters at the end of 2021 due to his friendly crypto framework from Hong Kong to the Bahamas.

Inhabitants of the United States cannot use the main platform of FTX technically, a determination of its user directive, which is enforced loosely by geoblockers that are avoidable via virtual private networks. The US version offers fewer cryptocurrencies and leverage, similar to the gap between Binance's own platforms.

a page It says: "US users cannot act with ftx can act on ftx.us. "

SEC boss Gensler says that FTX is trendy for crypto for crypto

Brian Armstrong, CEO of Coinbase, in a Twitter In late Wednesday, Senatorin Elizabeth Warren, who said, The explosion of FTX shows “Most of the industry seems to be fog and mirror, and asked the SEC to enforce more aggressive.

Armstrong argued that the enormous amount of offshore trade activities was a direct result of what it sees as a lack of clarity of the SEC about how the industry should work.

"The problem is that the SEC has not created any regulatory clarity here in the USA, so that many American investors (and 95 % of trading activities) have gone abroad.

ripple CEO Brad Garlinghouse agreed, emphasize that most of the crypto trade takes place because companies are practically not to comply with the regulations in the USA.

SEC boss Gary Gensler commented on the matter. At an event of the Healthy Markets Association on Wednesday, Gensler described the FTX situation as part of a wider trend within the crypto industry.

"It is really part of a pattern of what we have seen in the past six or eight months," he said. "Investors are injured if we do not rely on the proven guidelines for public order."

The former investment banker, who worked as a partner at Goldman Sachs, also emphasized the risks that result from the "mixing" of important intermediary functions if the same company fulfills several roles.

"We have a lack of disclosure, a lot of influence, use other people's money, a lot of networking ... ... the public investing hopes for a better future," he added.

But it would have no liquidity worries, a payout stop and customers who find their stocks closed on the FTX, for which SEC need to be used to find out how it can better serve the investors.

regulation through enforcement and a combative, unproductive approach in cooperation with industry, according to Simon Schaber, Chief Business Development Officer at Defi Protocol Spool, who drove innovative companies abroad.

"The FTX case is a direct result of the Sec failure," Schaber told Blockworks. "The decisions of the CEO Gensler once again suffer the most, and his former employers in investment banking benefit the most (domestic competition is kept in chess)."

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The Post Coinbase, Ripple CEOS accuse SEC for FTX User Strife is not a financial advice.