FTX founder Sam Bankman-Fried says he will testify before Congress

New York
CNN
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Sam Bankman Friedthe founder of the failed cryptocurrency exchange FTX, agreed witnessed by The Financial Services Committee in the House of Representatives next week, while questions and confusion revolve around the collapse of his companies.

On Friday, he tweeted that he was “willing to testify [December] 13”, and said he would “try to be helpful, take away what I can do” on several lawmakers’ concerns, including the solvency of FTX US, “routes” that could return “value” to users, and what he thinks It led to a breakdown and, finally, to his “failures”.

“I used to think of myself as a typical CEO, who wouldn’t get lazy or disconnected,” Bankman-Fried said. wrote on Twitter. “Which made it even more devastating when I did. I’m sorry. I hope people learn from the difference between who I was and who I could have been.”

His tweets came in response to requests from several members of Congress who called for testimony.

Democratic President Senator Sherrod Brown of Ohio and Republican Senator Pat Toomey of Pennsylvania He was asked to appear Because of the “important unanswered questions” surrounding the collapse of FTX and its sister hedge fund, Alameda, both of which filed for bankruptcy on November 11th.

“You must respond to the failure of both entities which resulted, at least in part, from the apparent misuse of client funds and the erasure of billions of dollars owed to more than a million creditors,” the senators wrote.

Bankman-Fried did not say whether he would also comply with the senators’ request that he testify at a hearing scheduled for Wednesday.

Separately, Sens. Elizabeth Warren of Massachusetts and Tina Smith of Minnesota, both Democrats, sent letters to three regulators — the Federal Reserve, the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency — asking them to assess the traditional banking system. Exposure to turmoil in the cryptocurrency space, which is a parallel and largely unregulated financial system.

“Cryptocurrency firms may have closer ties to the banking system than previously understood,” Warren and Smith write. “Banks’ relationships with cryptocurrency firms raise questions about the integrity and health of our banking system and highlight potential loopholes that crypto firms may try to exploit to gain more access.”

Federal prosecutors are investigating the collapse of FTX, an exchange that marketed itself as a beginner-friendly way to get involved in what was, until recently, a thriving if highly volatile market for digital assets. FTX also facilitated high-risk leveraged trading that was not permitted within the United States. (The company was based in the Bahamas.)

FTX was one of the largest cryptocurrency exchanges in the world until last month, when it faced a sudden wave of customer withdrawals that it couldn’t cover. One of the main questions prosecutors will likely study is whether FTX misappropriated clients’ money when it made loans to Alameda.

Bankman Fried denied the accusations of misuse of customer deposits. “I wasn’t mixing up the money on purpose,” he told the New York Times last week. “I was honestly surprised by how huge the Alameda position was.”

Federal prosecutors are also investigating whether Bankman-Fried played a role in the collapse of two related cryptocurrencies, Terra and Luna, this spring. According to The New York Timeswhich was cited by two people familiar with the matter.

The case is part of a broader investigation into FTX’s collapse, the newspaper said, and it’s not clear if prosecutors have identified any wrongdoing by Bankman-Fried.

In a statement to the newspaper, Bankman-Fried said it was “unaware of any market manipulation and certainly did not intend to manipulate the market.”

Correction: An earlier version of this story misstated Congressional Committee Sam Bankman-Fried saying he would testify before. He agreed to testify before the House Financial Services Committee.