Following the fallout from Sam Bankman-Fried's FTX, Gary Gensler discussed the cryptocurrency meltdown and the way forward. The US SEC is already looking into how the FTX US subsidiary handled customer assets. The Securities and Exchange Commission is also looking into possible connections between FTX and other businesses owned by Sam Bankman-Fried. According to reports, the probe is focused on the events leading up to the cryptocurrency exchange's liquidity constraint.
A crypto drop resulted from the statement that Binance was considering buying FTX and the subsequent news that FTX might go bankrupt. However, Binance declared that it was abandoning the FTX acquisition. SEC chairman Gary Gensler discussed the state of the cryptocurrency industry in the meanwhile. In an interview with CNBC on Thursday, Gensler asserted that cryptocurrency investors need to be protected. The runway is growing shorter, he claimed.
“Building the evidence, building the facts, often takes time. Crypto companies need to work with the SEC.”
The SEC head added that gathering evidence against cryptocurrency participants takes time since businesses interact with one another. He referred to the use of investor money and money that was secretly borrowed against it as a "toxic combination."