A powerful U.S. House of Representatives subcommittee is seeking documents and internal communications from Sam Bankman-Fried and FTX to understand how the cryptocurrency exchange collapsed so suddenly and what is being done to recover customer funds.
FTX, formerly one of the most trusted brands in crypto, filed for bankruptcy last week and announced the resignation of Bankman-Fried, its 30-year-old CEO who lost a fortune.
In a letter on Friday, Democratic Representative Raja Krishnamoorthi, chairman of the Oversight Committee’s Subcommittee on Economic and Consumer Policy, said he was “extremely concerned” about FTX’s failure and the “potentially significant harm” it will do to consumers. American consumers and investors.
Krishnamoorthi is requesting detailed information about the cash crunch facing FTX, the sudden decision to declare bankruptcy and what the company plans to do to “ensure every dollar is returned to the American consumers who have placed their trust in their company.”
The subcommittee, which had already launched an investigation into the crypto industry in August, requested information and documents by December 1, including all internal documents and communications since 2021 related to FTX’s liquidity issues, balance sheet, client funds, stakes in cryptocurrencies, money owed to customers and handling of customer funds.
“FTX investors and the American people demand answers,” said Krishnamoorthi.
Neither FTX nor a lawyer representing Bankman-Fried responded to a request for comment.
The letter cited revelations from newly installed FTX CEO John J. Ray, who in court filings this week described a “complete failure” by the cryptocurrency company to maintain financial controls. Ray said FTX’s failures eclipse even that of Enron, the infamous company whose liquidation he oversaw in the early 2000s.
Krishnamoorthi said he is “distressed” by comments Bankman-Fried has made since FTX’s bankruptcy, including an interview with Vox this week where the former FTX boss claimed he “didn’t intend” to “do sketchy things” but that “each individual decision felt good and I didn’t realize how big their sum was until the very end.”
Bankman-Fried was a face of the crypto industry and emerged as a white knight for struggling companies. He was also a top campaign contributor for the Democrats during the 2022 election cycle.
Earlier this week, Democratic Senators Elizabeth Warren and Dick Durbin demanded that FTX and Bankman-Fried hand over a collection of documents that would shed light on the collapse, including balance sheets and details on bailouts given to other cryptocurrency companies.
Source: CNN Brasil
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