House Financial Services Chair Maxine Waters today thanked disgraced FTX founder Sam Bankman-Fried for being “candid” when talking about the bankrupt exchange.
Waters (D-CA) also invited Bankman-Fried, who ran FTX until early November before its ignominious and well-publicized crash, to testify before the committee. The bipartisan hearing will take place on December 13 and will look into FTX’s fall and its “broader consequences for the digital asset ecosystem.”
Since FTX’s bankruptcy, Bankman-Fried had (apart from writing strange tweets) largely been laying low. But on Wednesday, he made a public appearance at The New York Times’ annual DealBook Summit, followed up by a Thursday interview on Good Morning America and an evening Twitter Spaces attended by more than 39,000 people.
“We appreciate that you’ve been candid in your discussions about what happened at FTX,” Waters said Friday on Twitter.
“Your willingness to talk to the public will help the company’s customers, investors, and others. To that end, we would welcome your participation in our hearing on the 13th.”
FTX’s crash has prompted U.S. lawmakers to try and figure out how to regulate the fast-moving and complex world of cryptocurrencies.
The popular exchange and its over 100 related entities went bust largely because of mismanagement at the top, it is alleged.
Once one of the biggest crypto exchanges, which specialized in derivatives trading, FTX allegedly used customer cash to make bets on another platform set up by Bankman-Fried, trading house Alameda Research. What’s more, Alameda may have had an unfair advantage when trading against FTX users. According to newly appointed FTX CEO John J Ray (of Enron liquidation fame), Alameda had “secret exemptions” from liquidations on FTX.
Yet, somehow, Alameda still lost billions. And when the contents of Alameda’s balance sheets came to light, FTX customers wanted out and a bank run led to the exchanges' collapse. Billions of dollars of clients’ money went up in smoke and a lot is still missing after it was unexplainably sucked out of the exchange the night the company filed for bankruptcy.
The U.S. Securities and Exchange Commision, the Department of Justice, and regulators in several U.S. states are investigating Bankman-Fried.
Stay on top of crypto news, get daily updates in your inbox.