California regulators to investigate FTX crypto exchange collapse

The California DFPI announced it will open up an investigation as to the “apparent failure” of FTX and says it takes this oversight very seriously.

The Department of Financial Protection and Innovation (DFPI) in the state of California announced on Nov. 10 that it will open up an investigation as to the “apparent failure” of the cryptocurrency exchange FTX. 

California regulators said in the announcement that the DFPI takes this oversight responsibility “very seriously” and that the department expects all entities offering financial services in the state to comply with local financial laws.

It also encouraged anyone in the state who has been affected by the events of the ongoing FTX saga, to call a dedicated hotline. 

The state of California is one of many governmental actors within the United States to recently speak out on the matter, despite the fact that FTX claims its U.S. branch is not involved in the incidents.

Sam Bankman-Fried, the founder of FTX, tweeted a 22-tweet thread in which he reiterated multiple times that FTX US is a different entity than the international one facing the turmoil.

19) A few other assorted comments:

This was about FTX International. FTX US, the US based exchange that accepts Americans, was not financially impacted by this shitshow.

It's 100% liquid. Every user could fully withdraw (modulo gas fees etc).

Updates on its future coming.

— SBF (@SBF_FTX) November 10, 2022

However, later on Nov. 10, FTX US announced it might halt trading on the platform in the upcoming days. Currently on the U.S. website, it states “withdrawals are and will remain open.”

Related: FTX turmoil increases scrutiny of industry, something institutional investors have been waiting for

incident as a mechanism to call for more regulations on the crypto industry.

On Nov. 10, Maxine Waters, the chair of the United States House of Representatives Financial Services Committee, called for tighter industry regulations and highlighted that FTX tokens are “worthless” and its customers are in the dark.

The same day saw White House press secretary Karine Jean-Pierre make a statement saying the administration will “closely monitor” activity in the crypto space. Moreover, the “recent news” underscores the need for “prudent regulation” of cryptocurrencies.

U.S. Senators Debbie Stabenow and John Boozman reiterated their commitment to finishing and publishing an upcoming crypto bill in light of the news, also citing the incident.

While all of this was underway, FTX US resigned from the Crypto Council for Innovation.