Sam Bankman-Fried to testify before Congress regarding the FTX fiasco

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FTX founder Sam Bankman-Fred said he is “ready to testify” next week at a US congressional hearing about the collapse of his cryptocurrency pool, in a juncture that marks his first public contact with US officials about the events. about its bankruptcy.

The US House of Representatives Financial Services Committee is investigating the collapse of FTX, with its first hearing scheduled for Dec. 13, as lawmakers try to piece together how Bankman Fried’s once-$32 billion crypto empire imploded, leaving millions of creditors potentially vulnerable. Including retail investors. losses.

The 30-year-old has been on a media onslaught since FTX filed for bankruptcy last month, giving interviews to multiple outlets against the advice of his lawyers in an apparent attempt to explain his role and understanding of the events that led to their collapse, but he has expressed an unwillingness to speak to Congress.

Now he has bowed to pressure after Maxine Waters, chairman of the Financial Services Commission, made clear a subpoena was on the table if he refused, and implored him to speak up in order to “help the company’s clients, investors and others.”

In a series of posts on Twitter on Friday, Bankman-Fried said he was ready to testify. “I still don’t have access to a lot of my data — professional or personal. So there’s a limit to what I can say, and it won’t be as useful as I want to be.”

John J. Ray, who took over as CEO of the now-defunct exchange and is running the bankruptcy proceedings, is set to be a witness.

The rapid collapse of Bankman-Fried’s cryptocurrency empire has sent shockwaves through the digital asset industry, sparking multiple investigations around the world, as dozens of authorities seek to understand how FTX and its Alameda Research boutique operated and failed. A series of other crypto companies, including brokerage Genesis and lender BlockFi, have also faced pressure due to ties to FTX.

Bankman-Fried, who has been in the Bahamas since the FTX collapse, said he would “try to be helpful during the hearing” and shed light on issues including “what I believe led to the collapse,” “my own failures,” and “paths” that can be traced back. value to international users.”

He has repeatedly denied willfully misusing client funds and committing fraud, but has admitted a lack of basic risk management and lost track of the intimacy between FTX and Alameda.

“I used to consider myself a model CEO, who wouldn’t get lazy or disconnected,” he said Friday. “I hope people learn from the difference between who I was and who I could have been.”

US lawmakers are increasing their scrutiny of the cryptocurrency industry. On Thursday, the US Securities and Exchange Commission required US-listed companies to disclose any impact from “widespread disruption” in the cryptocurrency markets. The regulator added that public companies should aim to provide investors with “specific and tailored disclosure” about how market events including bankruptcies will affect their business.

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Meanwhile, Changpeng “CZ” Zhao, CEO of cryptocurrency exchange Binance, continued his online criticism of his former rival. When FTX first ran into difficulties last month, Zhao initially offered to buy some or all of the platform. This deal may have been a bailout, but it quickly fell apart.

Binance was also an early investor in FTX and exited the investment last year. Zhao said on Friday that the decision was met with an “undifferentiated” response from Bankman Fried.

“He launched a series of offensive tirades at several members of the Binance team, including threats to go to “extraordinary lengths to make us pay,” Zhao wrote on Twitter.

Bankman Fried replied, “I won.” “None of this is necessary. You won. Why are you lying about this now?”

Video: Cryptocurrency: How Regulators Lost Control

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