US Lawmaker Questions Major Crypto Exchanges Over Consumer Protections Amid FTX Collapse

Binance, Coinbase, Bitfinex, Gemini, Kraken and KuCoin were targets of a senator's investigation into the protections put in place by companies if similar failure to FTX happened again.

Ron Wyden, Chairman of the United States Senate Finance Committee, has requested information from six crypto companies on consumer protections following liquidity problems and the bankruptcy of FTX.

In separate letters dated Nov. 28, Wyden targeted Binance, Coinbase, Bitfinex, Gemini, Kraken, and KuCoin, requesting information on the protections the exchanges have in place in the event of a failure like the one that occurred. at FTX. The senator said crypto users who had funds with FTX had "no such protection" like that of banks or brokers registered with the Federal Deposit Insurance Corporation or the Securities Investor Protection Corporation. p>

“As Congress considers much-needed regulations for the crypto industry, I will focus on the clear need for consumer protections along the lines of long-existing assurances for customers of banks, credit unions and stockbrokers," Wyden said. . "If these protections had been in place before the failure of FTX, far fewer retail investors would face precipitous financial damage today."

Consumers who have entrusted their assets to companies like @FTX_Official are finding they have no protection when companies go bankrupt. As Congress considers much-needed regulations for the crypto industry, my focus is on ensuring real protections for consumers. https://t.co/QRdSUKe0A3

Wyden has asked the six companies to provide answers to questions, including those about their subsidiaries, safeguards for consumer assets, use of customer data and protections against market manipulation by the 12th december. The Senate Committee on Agriculture has