Japanese authorities have asked FTX to suspend its operations. Authorities from The Bahamas have also frozen the exchange’s assets.
Regulators in various countries are scrutinizing FTX following its collapse. The government of Japan has ordered the local subsidiary of the exchange to suspend some operations. Authorities from the Bahamas have done the same.
The Financial Services Agency (FSA) of Japan took administrative action against the Japanese unit of FTX. It referred to the exchange’s precarious financial situation,
“There have been reports that FTX Trading Limited is facing credit uncertainties. It is necessary to take all possible measures to prevent a situation in which the interests of creditors and investors are harmed by the outflow to affiliated companies of the company. Therefore, this situation of our company is not recognized as having the necessary system in place to properly carry out [its financial obligations].”
FTX also has a one-month suspension order issued by The Kanto Local Finance Bureau. The suspension will last until Dec. 9. The reason behind the order was that FTX “accepted deposits while freezing withdrawals of deposited assets, without giving users adequate explanations.”
FTX issued a statement following the order, saying that it was following the guidance of Japanese authorities. It is putting the exchange into close-only mode.
Bahamas freezes FTX assets
The Bahamas also took action against FTX, freezing the exchange’s assets as well as those linked to “related parties.”
The official notice highlighted that authorities were aware of “public statements suggesting that clients’ assets were mishandled, mismanaged and/or transferred to Alameda Research.”
FTX is based in The Bahamas. The exchange has only recently reopened withdrawals in the country. With the freezing of assets, the exchange is inching ever close to a complete implosion.
A recent report also showed that Alameda Research held large amounts of the FTX token. This stirred up concerns as attention was also falling on unusual transactions surrounding FTX and Alameda.
U.S. senators proceeding with crypto bill
While Sam Bankman-Fried’s FTX is falling, the United States is moving ahead with a bill supported by the FTX CEO. Senators plan to move forward with the bill, which would establish more oversight on the crypto market. This also includes the decentralized finance (DeFi) sector.
The bill caused some controversy as some saw it as “killing DeFi” while parading as a solution leading to regulatory clarity and consumer protection. The criticism was that Bankman-Fried was supporting a bill that would effectively ban DeFi. The gist of it is that the bill would force DeFi protocols to operate like centralized exchanges, defeating their very purpose.
This plan received heavy criticism on Twitter, as many claimed the policies within would be self-destructive.
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