FTX founder Sam Bankman-Fried plans to testify before Congress
- December 9, 2022
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The former CEO of failed cryptocurrency exchange FTX said in a tweet on Friday that he was ready to testify before Congress next week, but that he was qualified in what he could say and “won’t be as helpful” as he is. would like to.
The tweet came in response to several tweets earlier this month from House Financial Services Committee Chair Maxine Waters who had asked that Sam Bankman-Fried attend next week’s FTX collapse hearings.
Waters, a California Democrat, said in a series of tweets to Bankman-Fried that based on multiple media interviews since FTX collapsed, “we realized that the information you have to date is sufficient to make a statement.”
Based on your role as CEO and your media interviews over the past few weeks, we understand that the information you have to date is sufficient to make a statement. (1/3) https://t.co/YUVVjOkC40
— Maxine Waters (@RepMaxineWaters) December 5, 2022
The one-time crypto prodigy spoke to The New York Times at a Dealbook event on Nov. 30. A live audience sat in silence as Bankman-Fried, speaking via video from his home in the Bahamas, stumbled on the causes of FTX’s collapse.
FTX failed a cryptocurrency version of a bank run last month. Users withdrew about $5 billion worth of crypto assets in a single day amid growing concerns about FTX’s solvency. Since its collapse, FTX’s new management has described the cryptocurrency exchange’s management as a “complete failure of corporate controls.”
In tweets that Waters responded to, Bankman-Fried listed specific issues he could discuss with the committee, including the solvency of FTX’s US operations, its American clients, and potential solutions to returning assets to international clients. He also said he could speak up about what he thinks led to the crash and “my own mistakes.”
FTX Co-Founder Sam Bankman-Fried Defends Crypto Exchange Collapse 06:11
Bankman-Fried said he took responsibility for the collapse of FTX and that he failed to grasp the level of risk that Bermuda-based FTX and Alameda Research, FTX’s trading arm, took on in both companies. Bankman-Fried has said in public interviews that he did not “knowingly” mix client assets with Alameda.
Bankman-Fried’s name was listed as a defendant in a class action lawsuit filed Friday accusing him and several celebrities of misleading marketing. It is the third class action lawsuit clients have filed against celebrities who promoted FTX Trading. Tom Brady and Larry David are among those accused of defrauding investors in the FTX collapse.
According to the lawsuit, celebrities have touted FTX “to instill trust and trick consumers into investing in a Ponzi scheme to mislead customers and potential customers into believing that all cryptocurrency assets held on the fraudulent FTX platform are safe and secure.” sure have not invested in unregistered securities.”
Bankman-Fried said he believes FTX’s US subsidiary is fully solvent and can begin processing withdrawals immediately. Referring to the rest of FTX, which was significantly larger than the US division, he said the fate of client funds is largely out of his control.
Waters said FTX’s collapse had “harmed more than a million people” and threatened to subpoena the 30-year-old if he didn’t agree to testify. “A subpoena is definitely on the table,” she said tweeted on Tuesday.