Cryptos gain, focused on the Fed, FTX and the Binance investigation
The cryptocurrency market is experiencing a sensitive rebound in recent hours. The upward momentum has led Bitcoin (BTC) to rise 1.3% and surpass $17,000, while Ethereum (ETH) is rebounding 1.5% and has launched itself towards $1,300.
The main news right now is Sam Bankman-Fried´s arrest, the founder and former CEO of the ill-fated FTX exchange, that occurred in the Bahamas at the United States´ request, as he was accused of committing wire and securities fraud, as well as money laundering. The Bahamas, Bankman-Fried's place of residence and FTX's headquarters, ordered the freezing of all Bankman-Fried's assets and confirmed that it was investigating the FTX founder, while different media reported a month ago that Washington and Nassau were working on the possible extradition of SBF.
It should be recalled that, prior to this arrest, Bankman-Fried was scheduled to appear before the House of Representatives of Congress on Tuesday, while the Senate requested that he appear voluntarily before the Upper House the following day, Wednesday 14. The American people deserve to hear directly from Bankman-Fried about actions that have harmed more than a million people," stated Maxine Waters, the Democratic representative who chairs the House Financial Affairs Committee.
John J. Ray III, the new CEO of FTX, will appear before the House of Representatives on Tuesday. The person in charge of fixing the mess caused by Bankman-Fried and its partners pointed out in a prepared statement before his hearing that the collapse of the platform was caused by "a very small group of highly inexperienced and unsophisticated individuals" and stressed that Alameda Research, Bankman-Fried's investment arm, had free reign to borrow funds from FTX for its business. Earlier, Ray claimed that FTX's bankruptcy was worse than that of energy company Enron.
All in all, this news does not seem to have drastically influenced cryptocurrency prices, which continue to await November's U.S. inflation data and Wednesday´s Federal Reserve (Fed) monetary policy decision. At this time, anything less than a 50 basis point hike would catch investors by surprise.
What does seem to be worrying the market is the possible money laundering investigation into Binance. According to 'Reuters', the Department of Justice has had Changpeng Zhao's platform under the microscope since 2018 and is split on whether to bring criminal charges on the world's leading 'exchange' or not.
"The withdrawals on the platform highlight the uncertainty and shattered confidence in the space, a desperation not to get caught up in another FTX event. Even when the situation looks very different. But that's what fear does, especially in a situation where confidence has been so severely damaged, as it has been in recent weeks," commented Craig Erlam, senior market analyst at Oanda.
In other market news, Binance coin (BNB) plunges in response to these reports. Ripple (XRP), Litecoin (LTC) and Dogecoin (DOGE) rebound noticeably.