Skip to main content

FTX Tragedy: Binance Demands More Transparency; the US Senate regulations

 


The negligence of Sam Bankman-Fried (SBF) and the resulting contagion effect are becoming increasingly clear. While Changpeng Zhao (CZ) is buying up struggling crypto companies while promoting greater transparency, the US Senate is more determined than ever to enact comprehensive crypto regulations .


Since the collapse of FTX, other crypto exchanges have also been trying to be more transparent. Many of them are willing to disclose their cold wallet balances as Proof of Reserves . Binance even offered to use the so-called Merkle Tree.


Most recently, Binance went a step further and hired global auditing firm Mazars to verify its token reserves. As a spokesman for the exchange explained, the third-party financial verification serves to improve the proof of reserves:


“Mazars is reviewing all of the information we have released about the Proof of Reserves to date and will continue to verify future updates and tokens. The first verification update for BTC will be completed this week.” 

Alongside its great efforts in transparency, Binance continues to expand into markets around the world . According to its own statements, the exchange recently acquired the Japan-registered crypto exchange service provider Sakura Exchange BitCoin (SEBC) .


Since SEBC is subject to the regulations of the Japan Financial Services Authority (JFSA), the acquisition allows Binance to legitimately enter the market. Japan's recent push to integrate cryptocurrencies convinced CZ and its crypto exchange to make another attempt to enter the local market. Four years earlier they had failed to do so.


FTX collapse hits more trading platforms

The contagion effect of the FTX collapse continues to spread. The crypto trading platform Auros Global in particular currently seems to be affected .


"As a result of the FTX bankruptcy, Auros is suffering from a short-term liquidity problem." 


According to the decentralized financial insurer M11.

Auros apparently missed a principal payment on a 2,400 WETH loan, which is worth about $3 million . The payment should have been made to a Maple Finance loan pool. While M11 clarified that this outstanding repayment does not necessarily mean a default, it shows how the industry continues to suffer from Sam Bankman-Fried's (SBF) dubious financial practices.


Despite FTX's years of success, SBF has always seemed to have a cavalier approach to risk, compliance and accounting . Even before the exchange was formed, several of his colleagues at Alameda Research resigned. The reason for this was said to be his negligence . 


According to these former employees, SBF often sidestepped their concerns about its risky cryptocurrency gambling. In addition, working capital was also often confused with commercial capital and net balances were unclear due to poor bookkeeping . Many of these issues were also identified by the current FTX staff who are now managing the company's bankruptcy.


US senators intervene

Meanwhile, even US senators, including Elizabeth Warren, spoke up. During a recent Senate Banking Committee hearing, she condemned FTX, with several Treasury officials taking center stage.


On the other hand, she praised the acting chairman of the Federal Deposit Insurance Corporation, Martin Gruenberg, for his actions. Without its efforts to isolate crypto from financial markets, FTX's collapse could have had a much larger impact on the traditional banking system .


Senator Sherrod Brown, chair of the Senate Banking Committee, recently outlined his vision for comprehensive regulation of cryptocurrencies. As he argued in a letter to US Treasury Secretary Janet Yellen, all relevant financial authorities should share oversight of the crypto industry .


The Senate Banking Committee has long been recognized as a key cryptocurrency legislator. In his letter, Brown went on to say that the collapse and impact of FTX prompted lawmakers to enact legislation. 

DISCLAIMER

All information contained on our website has been researched to the best of our knowledge and belief. The journalistic contributions are for general information purposes only. Any action taken by the reader based on the information found on our website is entirely at their own risk.

My Top Picks
Honeygain - Passive earner that pays in BTC or PayPal
MandalaExchange -The Best no KYC crypto Exchange! 
Womplay - Mobile dApp gaming platform that rewards in EOS and Bitcoin
Cointiply - The #1 Crypto Earning Site
LiteCoinPay - The #1 FaucetPay earner for Litecoin 
LBRY/Odysee - YouTube Alternative that lets you earn Money by viewing videos!
FaucetPay - The #1 Microwallet Platform
FREEBTC - The #1 FaucetPay earner for Satoshi's
FireFaucet - An earning site that pays better for some than Cointiply

Comments

Post a Comment

Popular posts from this blog

From offchain to offchain: Statechains meets Lightning

  Without a doubt, the most significant off-chain Bitcoin solution is the Lightning network. But in its wake, the statechain has emerged as an intriguing replacement. There is currently a proposal to link the two offchain networks. From an ocean, for example, you can see sunbeams glistening in the water, waves rippling, and possibly a jellyfish drifting toward the light. But you only see a small portion of it. The distance from the sea's surface to its bottom is hundreds of meters. It has dozens of different fish species swimming in it, crabs and starfish crawling on the bottom, shells clinging to rocks, and sea plants climbing up. A completely new world starts where your gaze diverges. You can picture a blockchain like Bitcoin, just like the sea. What you see on the outside is only a small portion of what is actually there; the set of UTXOs (coins) and transaction history that full nodes store are just the beginning of a much larger world. It's the plan, at least. With Bitcoin
Post a Comment
Read more

MSP Recovery and Tokenology aim to optimize healthcare with the help of Polygon

  MSP Recovery LLC, a Miami, US-based healthcare provider with an estimated enterprise value of $32.6 billion, is partnering with Web3 company Tokenology to jointly launch a new blockchain platform called Lifechain. Lifechain wants to leverage the verifiable and transparent nature of blockchain technology to aggregate medical care claims, medical expense reports and patient data and streamline their processing. For this purpose, MSP Recovery launched its own LifeWallet in January, which already has 1 million users. In addition to the wallet and blockchain platform, an associated crypto token called LifeCoin is also used. The press release explains that the primary purpose of the system is to enable secondary healthcare providers to more effectively bill health insurance companies for their costs. “The number of medical claims tokenized going forward will surpass $50 million per day by 2024. For this we need scalability, security and sustainability, which we have only found with Polygon
Post a Comment
Read more

British financial regulator criticizes cooperation between Binance and Paysafe

  The British financial regulator FCA has expressed concerns about the partnership between market-leading crypto exchange Binance and payment service provider Paysafe. As the British regulator complains, the partnership gives Binance access to the influential British payment network Faster Payments Service (FPS), from which the crypto exchange was previously cut off. Last June, the FCA ordered Binance to stop all business activities in Great Britain. As a result, prominent banks such as Barclays have terminated their cooperation with the leading crypto trading platform . Through the cooperation with Paysafe, Binance can now again offer deposits in British pounds sterling and transactions within the European Payments Area (SEPA). However, this fact is a thorn in the side of the FCA, as it classifies the crypto exchange as a “considerable risk factor”. However, the financial regulator sees little room for maneuver to counteract this, as the Financial Times reports . “ Paysafe understands
Post a Comment
Read more