The catastrophic collapse of FTX should serve as a wake-up call to Congress to address the risks presented by the highly unregulated crypto market, according to Senate Banking Committee Chair Sherrod Brown.
Brown and his colleagues are “trying every day” to implement new rules and collaborate with federal authorities to “crack down on crypto.”
He said on CNN’s State of the Union on Sunday:
“It’s not like we snap our fingers and get a crypto bill through the Senate and through the House. Half the Senate, the Republicans and a handful of Democrats, still think crypto is legitimate and that it is something that should be a significant part of our economy.”
While the FTX debacle and the $8 billion hole in its balance sheet have reverberated throughout the crypto industry, Brown stated that the regulatory effort is not the result of “one crypto company.”
“This is about everything about national security. From Russian oligarchs to North Korean cyber criminals to gun runners to drug traffickers that love the thought of using unregulated, unrestricted cyber,” he said.
Last month, Brown encouraged Treasury Secretary Janet Yellen to collaborate with legislators on cryptocurrency legislation to ensure that its dangers do not bleed into traditional financial markets and institutions.
Top US financial leaders, including Yellen and Federal Reserve Chair Jerome Powell, have stated that the government’s authority to oversee crypto assets that are not covered by securities regulations is restricted.
According to court documents, SBF’s businesses mainly include trading company Alameda Research, founded in 2017, and cryptocurrency exchange FTX, launched in 2019, which has had a net loss of $3.7 billion since its inception.
An updated breakdown of the group’s cash holdings is included in the file, submitted late Monday by Alvarez & Marsal North America LLC, the prospective financial advisor to FTX Group. It states that the most recent data have much greater cash balances than the debtors were in a position to verify as of November 16.
The Alameda silo, dotcom silo, ventures silo, and West Realm Shires (WRS) silo all have cash balances that contain both their debtor and no-debtor firms. According to the petition, $751 million is owned by debtor businesses, while the remaining $488 million is held by non-debtor entities.
FTX Japan had a cash balance of $171.7 million, while controversial trading firm Alameda Research and related firms’ cash balances total nearly $401 million, according to a Bloomberg report.
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