Senator Ted Cruz believes that Binance showed “at least malice” last week when it refused to buy FTX after its own offer to buy.
Noting the speed with which Binance made an offer to acquire its distressed competitor and then withdrew it, Cruz suspected something was amiss.
The official added that it was appropriate for former FTX CEO Sam Bankman-Fried to testify before the U.S. Senate Judiciary Committee, where the politician sits.
This week, the U.S. House Financial Services Committee has already announced hearings on the FTX collapse and its implications for the digital asset industry as a whole. Cruz has made it clear that Binance’s role in the FTX crisis is under the scrutiny of Congress.
Nevertheless, this does not absolve FTX of responsibility:
There’s no question that there were a huge number of financial management errors and even the possibility of fraud, resulting in billions of dollars in losses for investors.
Meanwhile, FTX’s bankruptcy filing last week continues to lead to all sorts of consequences. For example, the Ontario Teachers’ Pension Plan, one of the largest pension funds in the world, announced it had written off $95 million invested in FTX.
Genesis Global Capital, Genesis Trading’s lending arm, temporarily suspended repayments and new loans as a result of $175 million of its funds being on the bankrupt exchange.
As for regulation, Cruz argues that the government should “proceed slowly and carefully.”
There’s a real risk that government regulators will take too tough action and wreck a trillion-dollar industry.
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