In the words of Senator Ron Wyden, “Consumers who entrusted their assets to firms like FTX are discovering they have no protections when companies go bust.”
Ron Wyden, the Chairman of the Senate Finance Committee, sent letters to the CEOs of six crypto exchanges asking them to reveal details about their financial position. The targets of Wyden’s probe are KuCoin, Gemini, Bitfinex, Kraken, Binance, and Coinbase.
In the letters sent on November 28, the Senator pressed the exchanges to explain the measures they use to protect users’ assets, adding,
“Unfortunately, consumers who entrusted their crypto assets to FTX have no such protections. If these protections had been in place before the failure of FTX, far fewer retail investors would be facing precipitous financial harm today.”
Wyden asked the firms to send copies of their most recent balance sheets. He also requested them to disclose the results of their external audits, including Proof-of-Reserve audits.
Furthermore, the Senator pressed the exchanges to provide a list of real estate acquisitions made using clients’ funds. Wyden made these demands following FTX's bankruptcy crisis which has sent ripples throughout the crypto ecosystem.
Wyden has requested the firms to submit their responses by December 12, a day before a US House Committee commences its hearing on FTX’s downfall.
