House and Senate panels are scheduling hearings after renewed calls for Congress to strengthen regulation and oversight of the industry. They will examine the bankruptcy of cryptocurrency exchange FTX and its former CEO, Sam Bankman-Fried, in December.
Conforming to Bloomberg calculations, global exchange products oriented on cryptocurrencies and related themes resulted in a net inflow of $44.4M in the week ending Nov. 18. Ripple ETPs had the most outflows of $1.4M and $3.3M for products focused on Solana.
Exchange-issued cryptocurrencies, such as FTX Group’s FTT, may present “extreme” risks when guaranteed by the issuer. This was a warning from Bank of England Deputy Governor Jon Cunliffe in a speech on Monday. According to tax filings, the bankruptcy of FTX and related companies cost the federal government a net operating loss of at least $3.7B as of Dec. 31 last year.
Crypto Lender Celsius was Found to Have Had a Lack of Controls
According to an independent auditor appointed in the company’s chapter 11 bankruptcy, bankrupt crypto firm Celsius Network LLC’s crash had reasons. It failed to set up adequate accounting and operational controls for clients. There was no guarantee that client funds in specific deposit accounts were kept separate from the rest of its crypto assets.
According to the report of Shoba Pillay, Celsius had to take action to move money into the custody accounts from the remainder of its holdings. This was necessary to cope with recurring shortfalls. It did not create separate infrastructure for the so-called custody program it began offering in April. Moreover, Celsius continued to mix deposits in so-called withhold accounts with the remainder of its money. This was due to regulatory pressure. Ms. Pillay is an examiner investigating Celsius’ case. According to her, since the bankruptcy filing, Celsius customers have been unsure which assets belong to them.
