FTX founder Sam Bankman-Fried will testify next week at a US congressional hearing about his crypto group’s collapse, in a U-turn that will mark his first public contact with US officials over the events surrounding its bankruptcy.
Maxine Waters, chairwoman of the U.S. House Financial Services Committee, on Friday announced Bankman-Fried’s participation in the first hearing on the subject, scheduled for Dec. 13. Just hours before, the entrepreneur said he was “ready to testify.”
The panel is investigating the collapse of FTX as lawmakers try to explain how Bankman-Fried’s crypto empire, once worth $32 billion, crumbled, leaving potentially millions of creditors, including retail investors, with losses.
The 30-year-old has been on a media blitz since FTX filed for bankruptcy last month, giving numerous media interviews against the advice of his lawyers in an apparent attempt to explain his role and understanding of the events leading up to the collapse, but he has expressed reluctance to speak. before Congress.
He has now bowed to pressure after Waters made it clear he would be subpoenaed if he refused and begged him to speak out to “help the company’s customers, investors and others”.
In a series of Twitter posts Friday, Bankman-Fried said he would be willing to testify. “I still don’t have access to much of my data, professional or personal. So there’s a limit to what I’ll be able to say, and I won’t be as helpful as I’d like to be,” he added.
John Jay Ray, who took over as CEO of the now-defunct exchange and is leading its bankruptcy proceedings, is also scheduled to testify in a separate panel.
The rapid collapse of Bankman-Fried’s crypto empire sent shockwaves through the digital asset industry, prompting multiple investigations around the world, with dozens of authorities trying to figure out how FTX and related trading shop Alameda Research operated and failed. A number of other crypto companies, including broker Genesis and lender BlockFi, are also facing stress due to ties to FTX.
Bankman-Fried, who remained in the Bahamas after the FTX collapse, said he would “try to be helpful at the hearing” and shed light on issues including “what I think led to the crash,” “my own gaps’ and ‘roads’ that could return value to consumers internationally’.
He has repeatedly denied knowingly misusing client funds and committing fraud, but has admitted to a lack of basic risk management and lost sight of the cozy relationship between FTX and Alameda.
“I thought of myself as an exemplary CEO who wouldn’t get lazy or detached,” he said Friday. “I hope people can learn from the difference between who I was and who I could have been.”
US lawmakers are tightening their grip on the crypto industry. On Thursday, the US Securities and Exchange Commission told US-listed companies to disclose any impact from the “widespread disruption” in crypto markets. The regulator added that public companies should aim to provide investors with “specific, tailored disclosure” about how market events, including bankruptcies, have affected their business.
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Meanwhile, Changpeng “CZ” Zhao, CEO of crypto 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. That deal would have likely been a life-saving deal, but it quickly fell apart.
Binance was also an early investor in FTX and exited the investment last year. Zhao said Friday that this decision was met with a “nonsensical” response from Bankman-Fried.
“He went on a series of abusive rants at multiple Binance team members, including threats to go to ‘extraordinary lengths to make us pay,'” Zhao wrote on Twitter.
“You won,” Bankman-Fried replied. “None of this is necessary. You won. Why are you lying about it now?”
Additional reporting by Stefania Palma in Washington
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