FTX Crash: US White House Escalates Its Crypto Regulation Rhetoric

FTX Crash: US White House Escalates Its Crypto Regulation Rhetoric

• White House Secretary said stronger oversight of crypto is necessary to prevent hurting Americans.
• Binance CEO said FTX’s fall was terrible for the crypto industry due to its implications.
• The Zhao-led crypto exchange withdrew from a contract to acquire FTX.

Following the insolvency of the FTX crypto exchange, the US White House could be taking a more assertive stance towards crypto regulations. The White House’s secretary, Karine Jean-Pierre, said the most recent news further underscores the existing concerns and highlights why prudent regulation of cryptocurrencies is necessary.

Jean-Pierre expressed these concerns at a press conference last Thursday, adding that “without proper oversight of cryptocurrencies, they risk harming everyday Americans.”

Changpeng Zhao, the CEO of the largest cryptocurrency exchange Binance, said in a letter to his employees that FTX’s going down was terrible for the crypto industry due to its implications.

He further added:

User confidence is severely shaken. Regulators will scrutinize exchanges even more. Licenses around the globe will be harder to get

Previously, FTX was the second-largest crypto exchange after Binance. Its collapse led to a massive devaluation of the crypto market, losing over $200 billion within a week. Additionally, Binance attempted to save the embattled firm from impending bankruptcy when it signed a non-binding letter of intent to acquire it.

However, the Zhao-led crypto exchange withdrew from the contract, adding:

As a result of corporate due diligence, as well as the latest news reports regarding mishandled customer funds and alleged US agency investigations, we have decided that we will not pursue the potential acquisition of FTX.com. Furthermore, the collapse of the two Terraform Lab projects six months ago sparked a wave of regulatory pronouncements for digital asset businesses. South Korean authorities in September issued an arrest warrant against its founder Do Kwon.

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