The US House of Representatives Financial Services Committee will hold a hearing about the bankruptcy filing of crypto exchange FTX in December, the committee announced Wednesday.
The hearing will investigate the collapse of FTX, as well as the ramifications of the company filing for bankruptcy. It will also look into the ecosystem of digital assets, which has minimal government regulations. The committee plans to hear from FTX founder and former CEO Sam Bankman-Fried, as well as from individuals from his trading firm Alameda Research and from Binance, the largest crypto exchange.
"The fall of FTX has posed tremendous harm to over one million users, many of whom were everyday people who invested their hard-earned savings into the FTX cryptocurrency exchange, only to watch it all disappear within a matter of seconds," said Rep. Maxine Waters, a Democrat from California and chairwoman of the committee. "Unfortunately, this event is just one out of many examples of cryptocurrency platforms that have collapsed just this past year."
Waters said that legislative action is needed to establish federal oversight of digital assets entities, with clear rules, so that they "cannot operate in the shadows."
FTX found itself in financial ruin in recent weeks because of a lack of liquidity as customers began withdrawing funds from the exchange. Binance was in the position to provide a bailout to its competitor, but decided against it after doing its due diligence into FTX's books. The company filed for Chapter 11 bankruptcy protection on Nov. 11 as Bankman-Fried began trying to raise $9.4 billion in funds to cover customers' assets.