FTX described its “robust” security practices and advocated against stricter safeguards on client assets in a letter to the Australian government a little more than five months before the cryptocurrency exchange collapsed.
(Bloomberg) — FTX described its “robust” security practices and advocated against stricter safeguards on client assets in a letter to the Australian government a little more than five months before the cryptocurrency exchange collapsed.
Crypto firms shouldn’t be forced to keep clients assets locally or using a third-party firm, FTX wrote in a submission to the nation’s Treasury department dated May 29 that was recently made public.
“Larger more sophisticated groups such as FTX have invested significant sums in developing robust security practices which achieve the necessary levels of security while keeping custody of assets ‘in-house,’” according to the document.
FTX’s implosion last month came after the exchange had wooed regulators worldwide for years. Founder Sam Bankman-Fried, who was arrested in the Bahamas on Monday, had testified before the US Congress and had been active in the debate over whether the crypto space should be more tightly regulated.
The assertions in the Australian letter are at odds with the assessment of new FTX CEO John J. Ray III, who said recently that the exchange had “absolute concentration of control in the hands of a very small group of grossly inexperienced and unsophisticated individuals.”
Read more: Bankman-Fried Accused of Fraud by US After Bahamas Arrest (1)
“By providing regulatory certainty, consumers can be confident that they are dealing with legitimate businesses and that their consumer rights can be enforced,” FTX said in the Australian letter. “Likewise, a clear regulatory regime will provide greater business certainty.”
The Australian Financial Review reported earlier on the letter.
–With assistance from Victoria Batchelor.
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