Regulators circle as rival exchanges try to calm investors

NEW YORK: Regulators opened probes following last week’s spectacular collapse of crypto exchange FTX and rival exchanges sought to reassure jittery investors of their own stability, weighing on cryptocurrencies.

The implosion of FTX, once a darling of the crypto industry with a Us$32bil (Rm147bil) valuation as of January, has spurred investigations by the US Justice Department, the Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission, a source with knowledge of the investigations said.

The SEC probe is also targeting FTX executives, their knowledge of the handling of customer funds and any potential breaking of securities laws, a second source with knowledge of the investigation said.

While the crypto industry has touted digital assets as fundamentally different from traditional finance, the sector has proven to be susceptible to the same risks and should be subject to the same rules, Federal Reserve vice-chairman Lael Brainard said on Monday.