What is the White House Doing In The Wake of the FTX Fiasco?

Updated: 11 November 2022

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The White House Press secretary, Karine Jean-Pierre, said that the Biden administration and financial market regulators would closely monitor the developments within the crypto market. The remarks come in the wake of the collapse of FTX, which was once one of the largest cryptocurrency exchanges globally.

White House is closely monitoring developments in crypto

According to the White House, the administration was keeping a close eye on the developments happening in the crypto space amid the crash in cryptocurrency prices. However, the administration has bestowed regulators with the responsibility of any enforcement actions that may be needed.

While giving a press briefing on November 10, the White House Press Secretary said that the US President, Joe Biden, was aware of what was happening within the crypto industry, which could likely be connected to the insolvency of the FTX exchange. The Press Secretary added that the developments within the market could continue to be monitored closely.

She noted that the US has been pushing for the proper oversight of the cryptocurrency market, adding that lack of proper oversight risked harming US investors. “The most recent news further underscores these concerns and highlights why prudent regulation of cryptocurrencies is indeed needed,” she said.

The latest briefing by the White House follows a string of responses from US regulatory bodies following the collapse of the FTX exchange. The Securities Exchange Commission (SEC) and the Commodity Futures and Trading Commission (CFTC) are already looking into the recent developments.

US lawmakers have also shared their thoughts on the matter. The Chair of the House Financial Services Committee, Maxine Waters, is advocating for more federal oversight over the crypto market amid the FTX situation. Representative Tom Emmer has also accused the chair of the SEC, Gary Gensler, of working with the former CEO of FTX, Sam Bankman-Fried, to develop a “regulatory monopoly.”

The former CEO of FTX was one of the largest donors in the US campaigns. He reportedly donated over $5 million to the Biden presidential campaign in 2020. He was also the second-largest donor for the Democratic Party in the 2021-2022 election cycle.

It is also not the first time the White House has shown interest in crypto. In March, US President Joe Biden signed an executive order to establish a robust framework for regulating digital assets in the country. This executive order has guided federal departments such as the Treasury in releasing reports about the space.

FTX files for bankruptcy

FTX has already filed for Chapter 11 bankruptcy protection within the US, marking a shocking end to Bankman-Fried’s crypto empire. The bankruptcy filing was made in a Delaware federal court, including FTX International, Alameda, FTX US, and around 130 other affiliated companies.

The bankruptcy filing comes after Bankman-Fried made unsuccessful efforts to raise money and solve the exchange’s liquidity crunch. Bankman-Fried has also resigned as the FTX CEO and has been replaced by John R Ray, a restructuring specialist.

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