The platform reportedly used billions of dollars from its clients to fund risky bets through its partner investment firm, Alameda Research, a practice in illegal principle if it did not have the approval of the users
The Treasury Secretary of The US demanded in-depth supervision of the cryptocurrency market after the bankruptcy of FTX. (REUTERS)
The US Secretary of the Treasury, Janet Yellen, on Wednesday called for more effective supervision of the cryptocurrency markets following the sudden collapse of the FTX platform.
pointed to lack of transparency and conflicts of interest as the biggest risks in these markets.
“We have very robust investor and consumer protection laws for most of our financial products and markets that are designed to deal with these risks,” said Yellen, who called for these same regulations to be applied to cryptocurrencies as well. .
investors who group together to denounce those responsible and well-known companies that take measures to protect themselves.
FTX became the last few years in one of the most important cryptocurrency platforms in the world with an estimated value of 32,000 million dollars. (REUTERS)
This Wednesday, crypto asset investment bank Genesis Global Tradingtemporarily suspended loan origination and amortization at its lending unit, Genesis Global Capital, due to a lack of liquidity exacerbated by the fall of FTX, its parent company, Genesis, said on Twitter.
Genesis Global Capital has an institutional client base and had active loans of $2.8bn at the end of September, according to reports on their website.
Meanwhile, a group of investors in the United States have filed a class action lawsuit in Miami (Florida) against FTX, its director, Sam Bankman-Fried, and several celebrities who promoted platform, including American football athletes Tom Brady and basketball player Stephen Curry.
FTX became the latest years in one of the most important cryptocurrency platforms in the world with an estimated value of $32 billion, but collapsed within days amid doubts about its solvency, prompting many users to rush to withdraw their money, leaving it cash-strapped and in search of bailout.
The collapse of FTX continues hitting the cryptocurrency sector a week after its bankruptcy, with investors rallying to denounce those responsible and well-known companies taking steps to protect themselves. (REUTERS)
That capital injection never came and FTX ended up declaring bankruptcy last Friday, assuring that this was the best formula to protect its clients and seek that they can get their money back.
As has since emerged, FTX reportedly used billions of its clients' dollars to finance risky bets through its partner investment firm, Alameda Research, a practice that was initially illegal if it did not have the approval of users, which is why it is being investigated in the US and the Bahamas, where it is based.
(With information from EFE)