US Congress probes Binance’s role in FTX collapse

The role of Binance in the sudden collapse of one of its rivals, the FTX exchange, drew close attention from the US Congress. The Block reported that Representative Patrick McHenry.

The North Carolina Republican is the most likely next chair of the House Committee on Financial Services. The new Congress will begin its work in January.

However, McHenry noted that the impact of public statements by Binance CEO Changpeng Zhao on the FTX situation will be the focus of hearings as early as December.

“This is a serious and major event,” the congressman stressed.

The FTX exchange’s FTT token crash, which exposed a liquidity crisis on the platform, took place after the Binance chief’s statement on November 6 that the company was exiting its positions in the asset.

Zhao’s company ignored Alameda Research’s offer to buy the FTT tokens owned by it. Binance rejected the proposed acquisition of the distressed platform.

On November 11, the parent company FTX, Alameda Research and about 130 affiliated firms filed for bankruptcy.

According to McHenry, acting chair of the committee, Maxine Waters, has similar concerns about volatility in crypto markets. The call for all necessary witnesses at the hearings, including Sam Bankman-Fried, will be bipartisan, the congressman said.

The SEC and CFTC have opened investigations into FTX, Bloomberg reports.

According to Reuters, the activities of the bankrupt exchange are being studied by the U.S. Department of Justice. According to a lawyer with experience in the crypto industry, prosecutors have everything needed to bring criminal charges against Bankman-Fried.

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