US Congress Probes Binance’s Role in FTX Collapse

Published: Nov 16, 2022
Written By:

The United States Congress has decided to launch an investigation into Binance, citing it had a role in the downfall of FTX. This is much to the dismay of many crypto enthusiasts who seem to think Changpeng Zhao (CZ), CEO of Binance, was some kind of savior for the crypto community.

But the question is, will the US Congress find any damning evidence on Binance?

Regulatory Scrutiny

After the fall of the third largest crypto exchange in the world, many in the crypto space predicted that regulatory scrutiny will increase in the industry. Well, they were not wrong. This is the first (of many) official regulatory moves on crypto from the United States.

Still, many in the space defend Mr. Zhao for his actions to blow up the largest Ponzi scheme the crypto world has ever seen.

CZ’s stance on crypto transparency led him to become extremely vocal about change in the space. He called out for exchanges to adopt Merkle Tree Proof-of-Reserve to ensure transparency for their customers, publishing a snapshot of Binance’s $69 billion worth of crypto reserves in the process.

Some people, however, are still not buying it:

Will Regulators Finally Win?

The United States Securities and Exchanges Commission has been on the neck of Ripple XRP, trying to classify them as a security. While the court battle has mostly been in favor of Ripple Labs, regulators are not loosening their hot pursuit. They are striking while the wound is still fresh. The SEC has yet to make any official statements concerning the FTX incidents. 

Still on this, the SEC Chairman, Gary Gensler, warned that Ethereum’s status as an asset could change after the blockchain migrated from PoW to PoS.

The verdict is not out yet, and the entire crypto world awaits patiently (not so patiently) for an official statement from the SEC, which could drastically affect the market.