Members of the House Financial Services Committee are expected to host Sam Bankman-Fried and his collapsed cryptocurrency companies, FTX and Alameda Research, in a hearing slated for some point next month.
FTX officially filed for bankruptcy this past Friday in the wake of its users finding out that both groups, which are entirely controlled by Bankman-Fried and his cronies, were allegedly interconnected in a fraudulent manner, sparking a massive liquidity crisis as customers sprinted out to try and pull out their money. A large number of people and various institutional clients still have a sum of close to $8 billion sitting entirely frozen within accounts while Bankman-Friend begs investors to assist in compensating his user base.
In a release, House Financial Services Chairwoman Maxine Waters (D-CA) and Ranking Member Patrick McHenry (R-NC) officially announced that the bipartisan hearing is expected to hear statements and testimonies from Bankman-Friend and anyone involved in relation to the entities, such as their main competitor Binance, which almost bought out FTX. “Oversight is one of Congress’ most critical functions and we must get to the bottom of this for FTX’s customers and the American people,” stated McHenry in a statement released to the press. “It’s essential that we hold bad actors accountable so responsible players can harness technology to build a more inclusive financial system.”
During the recent midterm elections, Bankman-Friend handed out close to $39 million in contributions with the vast majority of these funds going to benefit Democratic candidates or likewise leaning political action committees, as explained in data obtained from Open Secret, which marked him as the sixth-largest individual midterm donor in the country.
On the other hand, however, FTX Co-CEO Ryan Salame chose to issue his donations in a more heavily Republican-leaning fashion, also discovered with data from Open Secrets.
“The fall of FTX has posed tremendous harm to over one million users, many of whom were everyday people who invested their hard-earned savings into the FTX cryptocurrency exchange, only to watch it all disappear within a matter of seconds,” tacked on water. “Unfortunately, this event is just one out of many examples of cryptocurrency platforms that have collapsed just this past year… we need legislative action to ensure that digital assets entities cannot operate in the shadows outside of robust federal oversight and clear rules of the road.”
Going past just members of Congress, various officials directly from Biden’s administration have shown an overt willingness to set up various regulations for cryptocurrencies. As part of a Tuesday interview with CBS News, Treasury Secretary Janet Yellen stated tha tthe nascent sector needs “appropriate supervision and regulation,” highlighting that the administration has marked “regulatory holes that need to be filled for this to be a space where Americans can feel safe doing business.”