Binance’s role in the FTX collapse is being examined by the US Congress!

In the wake of the collapse of FTX and its subsidiaries, Binance, the leading digital asset exchange by average daily volume traded, has come under global regulatory scrutiny. As a centralized exchange, regulators around the world are eager to understand whether Binance overstepped antitrust laws during FTX’s tenure.

In an interview with reporters, Representative Patrick McHenry, a top House Republican, confirmed that Binance’s role in FTX’s collapse was being examined by Congress.

Binance CEO Changpeng Zhao (CZ), however, vehemently denied any involvement in the FTX collapse, claiming that his exchange was a victim of the situation. In addition, Binance had a bag of FTX tokens, which the company allegedly did not liquidate in time. This gives the Binance team some breathing room for the upcoming December hearing.

Binance has repeatedly claimed that the cause of FTX’s collapse was “financial irregularities and possible fraud” in written comments to a British parliamentary committee. In particular, the British counterparts wanted to know what role Binance played in the collapse of FTX.

FTX collapse sparks global regulatory review

While the collapse of a major crypto-currency exchange is not news in the industry, FTX’s failure has sparked interest from regulators around the world. Moreover, FTX was legally regulated with a license to operate in several jurisdictions, including Australia, the United States and Singapore, among others. Thus, millions of people around the world were psychologically affected by the sudden collapse of FTX and Alameda.

The mystery surrounding Sam Bankman-Fried grew after $450 million worth of digital assets belonging to FTX customers vanished hours before the company filed for Chapter 11 bankruptcy.

As a result, McHenry told reporters that the FTX collapse has accelerated the need for regulation of centralized exchanges and the digital economy.

“We’ve had these conversations about what I think are the second-, third- and fourth-order decisions that we need to make as a committee to bring clarity,” McHenry said. “So I think the first step is to clarify what a digital asset is. And that means making a clear legal distinction here.”

Meanwhile, as more and more regulators focus on digital assets, crypto prices have fallen significantly in recent weeks. The price of bitcoin, for example, lost about $5,000 in two days after the FTX collapse. Nearly $100 billion has been wiped out from the digital asset economy in the past few days.

Nevertheless, the long-term bullish sentiment on digital assets has remained with many investors. Tesla CEO Elon Musk reaffirmed that bitcoin would survive, but warned that it could be a longer winter. In addition, the ongoing bear market has shown several characteristics of a struggling economy.