The Star Malaysia - StarBiz

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.

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