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The standoff between FTX and Binance underscores the need for clear rules, says Senator Lummis

Published on

January 10, 2023
Read Time:1 Minute, 48 Second

The feud between the CEOs of crypto exchanges FTX and Binance — Sam Bankman-Fried (SBF) and Changpeng “CZ” Zhao — not solely despatched cryptocurrency costs plummeting, but in addition reminded regulators to step in and keep away from comparable penalties sooner or later.

Ever since CZ publicly introduced Binance's intention to liquidate its FTX token (FTT) holdings, traders anticipating worth dumping started promoting their FTT holdings to attenuate their losses. What adopted was a steep 86% drop out there worth of the FTT, from the $22 vary to $3 in a matter of hours.

FTX Token (FTT) worth fell over 86%. Supply: TradingView

Nonetheless, the eventful day ended with CZ saying Binance's intention to amass FTX, and SBF handed the transfer citing client protections. In response to this improvement, US Senator Cynthia Lummis - identified in the neighborhood for her robust perception in crypto - highlighted the necessity for clearer crypto rules:

“The latest occasions which have transpired between FTX and Binance are the clearest instance but of why we'd like clear guidelines for digital asset exchanges in the US.”

She famous the significance of the Lummis-Gillibrand Accountable Monetary Innovation Act, a invoice sponsored by Senator Lummis, which goals to deliver digital property into the regulatory enviornment.

Given the obvious affect of crypto entrepreneurs in influencing cryptocurrency costs with just some tweets, Lummis highlighted:

"Market manipulation, lending and whether or not buyer funds and property have been adequately protected are just some of the various points my colleagues and I might want to think about over the approaching days."

Whereas SBF selected to stay silent for the previous 16 hours on the time of writing, CZ introduced it might outperform Binance's SAFE insurance coverage fund with $1 billion price of cryptocurrencies to regulate for latest worth swings.

Associated: Binance's FTX acquisition is seen as a transfer by the crypto group

On account of the FTX-Binance fiasco, SBF's private wealth plummeted 94% and robbed him of his billionaire standing in a single day.

Previous to Binance's acquisition announcement, Bankman-Fried's 53 % stake in FTX was price round $6.2 billion.

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Azeez Mustafa
Azeez began his FinTech career path in 2008 after growing interest and intrigue about market wizards and how they managed to become victorious on the battlefield of the financial world. After a decade of learning, reading and training the ins and outs of the industry, he’s now a sought after trading professional, technical/currency analyst and funds manager – as well as an author.
Last Updated : January 10, 2023
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