This US Senator Wants New Regulations To Protect Consumers Following FTX-Binance Debacle

Zinger Key Points
  • Senator Cynthia Lummis seeks regulations for crypto industry amid Binance-FTX fiasco.
  • The Senator expresses concerns over market manipulations and safety of customer funds.
This US Senator Wants New Regulations To Protect Consumers Following FTX-Binance Debacle

Senator Cynthia Lummis (R-WY) has called for clear rules for cryptocurrencies, following the debacle of FTX Token FTT/USD, the native token of cryptocurrency exchange FTX. This comes after Binance BNB/USD CEO Changpeng Zhao announced offloading all the tokens in his company’s reserve.

Following Zhao’s public announcement, the native token of FTX fell as much as 85%, to trade at $3 from the $22 range a few hours earlier.

In a plot twist to the FTX-Binance feud, Zhao announced that Binance would acquire the whole of FTX, except its U.S. subsidiary, to address potential liquidity concerns.

The announcement was met with severe backlash from the crypto industry, with prices of major digital assets like Bitcoin BTC/USD, Ether ETH/USD, Ripple XRP/USD, and Solana SOL/USD falling a massive 10%, 15%, 13%, and 25%, respectively.

“The recent events that have transpired between FTX and Binance are the clearest example yet of why we need clear rules of the road for digital asset exchanges in the United States,” said Lummis.

Also read: Binance To Provide Proof Of Reserves After FTX Acquisition Deal Announced

Senator Expresses Concerns Over Market Manipulation, Customer Funds

“Market manipulation, lending activity, and whether customer funds and assets were appropriately safeguarded are just a few of the many issues my colleagues and I need to consider in the coming days,” she noted.

Lummis emphasized the significance of her sponsored bill, the “Lummis-Gillibrand Responsible Financial Innovation Act”, which aims to bring digital assets under a regulatory framework and ensure transparent and fair exchange regulation.

FTX CEO Sam Bankman-Fried chose to keep mum over the past 16 hours, although Zhao, also known as"CZ" in the crypto community, disclosed filling up Binance's SAFE insurance fund with digital assets worth $1 billion to account for recent market swings.

Bankman-Fried’s personal wealth decreased by 94% as a result of the FTX-Binance debacle, thereby stripping him of his billionaire status.

The value of Bankman-Fried's 53% ownership in FTX prior to Binance's announcement of its acquisition was roughly $6.2 billion.

Next: The FTT Debacle: Want To Cash In? Here's What Experts Said After Binance Selloff

Photo: Courtesy of commons.wikimedia.org

 
Posted In: Changpeng Zhaocrypto regulationscryptocurrenciesFTXSam Bankman-FriedCryptocurrencyNewsTop StoriesMarkets

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