There’s no doubt that FTX’s FTT token did a lot of damage to its investors; some regretted buying a centralized exchange token in the first place, while some wished they could have avoided it at least.
A Japanese lawmaker has chided an industry crypto watchdog given that it could have helped investors prevent the massive loss from the FTT token if it had warned about potential red flags around the token when it approved it for a local listing this year.
Japan Lawmaker Blames Crypto Watchdog Over FTT Coin Approval
Per a local media report published earlier today, a Japanese lawmaker believes Japan Virtual and Crypto Assets Exchange Association (JVCEA), an industry cryptocurrency watchdog, could have saved investors if they had disclosed the risk surrounding FTT before approving it.
Offering consumers such details is vital for Japan to “maintain trust in a token economy,” said Akihisa Shiozaki, a lawmaker with the ruling Liberal Democratic Party. “It will become more and more important to ensure transparency for consumers when there are any matters that require attention to tokens.”
Notably, the FTX crash happened just as Japan was warming up to crypto again, hoping that developing digital asset ventures would aid the country’s economic growth. Shiozaki, who helped to design the nation’s crypto policy, added, “still, FTX’s meltdown shouldn’t cause Japan to reverse course in relaxing coin-listing rules.”
According to a document revealed last month amid a political meeting, JVCEA approval of FTT was “conditional.” As a condition for the approval, the crypto watchdog had enforced FTX Japan to keep track of Alameda Research’s FTT holding balance. An official at the country’s financial regulator confirmed that the JVCEA reported to the Financial Services Agency when it authorized FTT’s listing under some conditions.
The Downfall of FTX’s FTT Token
The meltdown of the FTT token follows the crash of the FTX exchange. Basically, the crumbling of both the exchange and its token resulted from poor record keeping and centralized control as well as alleged commingling of customer assets from the extensive FTT holdings between FTX and its trading house Alameda Research.
“FTX’s demise was due to problems in its governance as an exchange,” said Shiozaki. Though the FTX saga had a significant negative impact on investors and the crypto market at large, with a calling out like this on who could have helped prevent it, hopefully, a similar situation would be far from reoccurring.
Speaking of FTX, the founder, Sam Bankman-Fried, was reportedly arrested by Bahamian authorities yesterday, charged with separate charges dealing with the infringement of securities laws. According to Blockchain Reporter, citing legal experts’ views, severe punishment like life imprisonment could be faced by Bankman-Fried.