Benzinga - Following the recent collapse of cryptocurrency exchange FTX, billionaire Ken Griffin is urging American regulators to work together to supervise the cryptocurrency market more effectively.
Speaking at the Bloomberg New Economy Forum on Tuesday, the founder and CEO of Citadel said U.S. regulators should stop squabbling over territory — calling it “preposterous.”
"Without naming the agencies, they all dance around who owns what. The bottom line is American investors have really gotten hurt to the tune of hundreds of billions of dollars in the declining market cap of crypto over the last two years," Griffin said. "That really strikes at the entire core essence of what investor protection is all about."
Also Read: FTX Disaster Continues - Hacker Drains Accounts, Becomes 35th Largest Ether Holder
Market Watchers Speculate Turf War Market watchers have speculated that a turf war may be forming between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) over which agency should be in charge of cryptocurrency regulation.
CFTC chair Rostin Behnam stated last year that the organization should be the major regulator of the cryptocurrency markets. SEC chair Gary Gensler has argued that certain crypto assets should be regarded as securities.
Griffin considers the FTX collapse as one of the absolute travesties in the history of financial markets. The crypto exchange’s bankruptcy has damaged investor confidence and that the billions of dollars in losses will shake public confidence across all financial markets, he explained.
FTX filed for bankruptcy protection on Friday due to an unexpected liquidity crisis.
The cryptocurrency exchange, according to reports, used user funds for risky bets by its sister trading firm Alameda Research, which ultimately led to its collapse.
Griffin asserted that at the expense of customers, user funds were used to make investment decisions in favor of FTX shareholders.
"That's not permitted in America. You cannot use your customer assets to engage in proprietary trading. That's a huge no-no," the billionaire said.
Griffin also noticed a mysterious $7 million holding known as "TRUMPLOSE" on the FTX's balance sheet.
He noted that FTX CEO Sam Bankman-Fried was the second largest fundraiser to Democratic candidates and said that FTX entered into a terrain "that all of us are worried about."
He said a fraud of such magnitude occurring and no regulator being present to prevent it was a “really, really tough story.”
Next: FTX Founder Is Trying To Raise Funds To Pay Back Bankrupt Crypto Exchange's Clients: Report
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