Sam Bankman-Fried, The Founder Of FTX, Is In The Hot Seat As Senate Inquiries And Criminal Probes Move Forward
As congressional investigations ramp up in the coming weeks. Sam Bankman-Fried is about to face a barrage of legal repercussions for his role in the demise. He founded FTX, a cryptocurrency trading platform, in 2019.
This week, the Senate Agriculture Committee is in charge of managing the Commodity Futures Trading Commission (CFTC). Will hold a hearing on the abrupt demise of FTX. Information about the hearing provides to Business by the Arkansas-based office of GOP Ranking Member John Boozman. The CFTC Chairman Rostin Behnam will appear at the hearing. Which will accentuate the necessity of bringing accountability and transparency to the cryptocurrency market,” according to Boozman’s office.
According to a representative for Boozman, the committee is reexamining the matter in light of the current circumstances. Chairwoman Stabenow and Ranking Member Boozman introduced the legislation. On the subject after previous hearings on the CFTC’s role in overseeing digital assets.,” the spokesperson said.
The statement continued, “The hearing will give us a chance to question Chairman Behnam regarding what the CFTC needs from Congress. To create a regulatory framework that will increase consumer confidence in the security of their investments.
Additionally, the senator’s office cited his remarks regarding enacted in 2022. The Digital Commodities Consumer Protection Act. A piece of legislation he and Michigan senator Debbie Stabenow. The chairwoman of the agriculture committee introduces in the wake of FTX’s demise.
The Bahamas-based FTX earlier this month filed for bankruptcy following a liquidity crisis. That caused a large-scale exodus of users from the platform. According to numerous reports, Bankman-Fried allegedly transferred $10 billion in customer credit from FTX to sister company Alameda Research.
Bankman-estimated Fried’s net worth fell from more than $15 billion to nothing in just a few days. During the company’s demise. In a public apology, the former billionaire acknowledged that he had been “fed up.” The new CEO of FTX said During proceedings in court that he had never attended before witnessed “such a complete failure.”
According to the company’s new CEO, John Ray III, “this situation is unprecedented, from compromised system integrity and subpar regulatory oversight abroad to the concentration of power in a minimal number of untrained, uneducated, and possibly compromised people.”
Earlier in the 2000s, Ray III oversaw the bankruptcy proceedings for the defunct emery company Enron. The scandals surrounding Lehman Brothers and the Ponzi scheme run by former NASDAQ Chairman Bernie Madoff. Brought up compared to the FTX collapse.
The chair also announced a hearing to look into FTX. Maxine Waters is a member of the House Financial Services Committee of California, and the top Republican on the panel, Rep. Patrick McHenry of North Carolina. The two leaders stated in their joint statement that Bankman-Fried and other executives from FTX and Alameda Research are anticipated to participate in their hearings, which will be held in December.
FTX’s collapse has severely harmed over one million users. Any of whom were regular individuals who invested their hard-earned funds in the cryptocurrency exchange only to watch it all vanish in a matter of seconds, according to Waters, who made the statement on November 16.
A finance committee member and the banking committee chairman, Sen. Sherrod Brown, D-Ohio. He also stated that he intended to lead his investigations but was concerned that some lawmakers might find the fact that they have financial ties to have conflicts in the interest cryptocurrency industry. Before the midterm elections, millions of dollars went to Democrats from Bankman-Fried alone. She also contributed about $10 million to President Biden’s 2020 campaign.
On November 17, Brown said to Fox News, “It’s challenging when a lot of members here, especially The Senate’s more pro-bank and pro-corporate senators, have accepted donations from cryptocurrency companies and praised them there.”
“The root of the issue is that. I’m urging the Securities and Exchange Commission (SEC) to take action and ensure that they are held accountable for what they’ve done because of this, “said he.
This year, Bankman-Fried contributed to the campaigns of Boozman and Stabenow, per information from the Federal Election Commission. He sent $50,000 to the organization Heartland Resurgence, which primarily backed Boozman during the state primary and opposed his Republican opponent and $20,800 to the Stabenow Victory Fund. The maximum amount of $5,800 donates to each lawmaker’s campaign.
The Bankman-Fried campaign previously informed FOX Business that it would donate any money it received to charity.
In the meantime, senior federal regulators request to provide pertinent Sen. Josh Hawley, R-Mo., a member of the Judiciary Committee, provided information about FTX and their inquiries into the platform. Like Brown, he expressed concern that some politicians investigating the crisis might be biased.
In a letter dated November 18, Hawley informed the leaders of the Department of Justice (DOJ), SEC, and CFTC, “To be clear, Mr. Bankman-Fried funded his lavish donations to the Democratic Party through rampant fraud.” Millions of dollars were ultimately taken from investors and given to Democrats and left-leaning organizations.
In the Bahamas, where he currently resides, Bankman-Fried is said to have cooperated with law enforcement. As part of ongoing criminal investigations, the federal government may seek to extradite Bankman-Fried to the United States.
Among the American agencies that have started their investigations into the founder of FTX are the DOJ and SEC.
There was no reply to a request for comment by Stabenow’s office.