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FTX owes its largest creditor more than 3bn.

Collapsed crypto exchange FTX owes its largest creditors more than $3bn, court filings published at the weekend have revealed, as a former top US regulator urged authorities to "get on with" protecting investors. FTX's collapse showed that US regulators must combine forces and use existing powers rather than wait for new laws, according to Sheila Bair.

 Bair helped lead the regulatory response to the 2008 financial crisis as head of the Federal Deposit Insurance Corporation. "The regulators need to swallow hard and get an agreement and then start implementing, using the authorities they have now," Bair said. However, Bair said she strongly disagreed, based on her experience with consumer lending.

 "Bair said she did not expect the collapse of crypto prices to cause broader financial instability. "Federal law of cryptocurrency-related products and trading has been stalled by claims that it falls between the jurisdictions of the Securities and Exchange Commission, the Commodity Futures Trading Commission, and banking regulators. So when senators asked US regulators last week who had been monitoring FTX, once worth $32bn, there was an awkward pause.

There is a fraught debate on whether agencies should produce crypto-focused regulation, with some lawmakers and industry figures calling for more guidance. At the same time, market regulators argue existing laws are sufficiently clear. The troubles at FTX could affect fin-techs trying to harness the same distributed ledger tech, Bair warned.

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  1. Anonymous21 November 2022 at 18:26

    It's pretty clear that no one was really paying attention to FTX and what was going on there. And I wonder how many other such instances there are in the crypto market. If everything is left to change and without any clear and enforceable regulations, this will happen again.

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