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




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Sam Bankman-Fried, the founder of failed crypto exchange FTX, has agreed to testify before the House Financial Services Committee next week as questions and confusion arise over the collapse of his companies.

On Friday, he tweeted that he is “willing to testify about [December] 13,” and said he’ll “try to be helpful and throw what he can” on a number of lawmakers’ concerns, including the solvency of FTX US, “pathways” that could return “value” to users, what he thinks what It led to the accident and eventually his “own faults”.

“I had considered myself a model CEO, who would not become lazy or disengaged.” Bankman-Fried wrote on Twitter. “Which made it that much more destructive when I did it. I am sorry. Hopefully people can learn from the difference between who I was and who I could have been.”

His tweets are in response to requests from various members of Congress who demanded testimony.

He was asked to appear by Democratic Chairman Senator Sherrod Brown of Ohio and Republican Senator Pat Toomey of Pennsylvania because of “important unanswered questions” surrounding the collapse of FTX and its sister hedge fund, Alameda, who have filed for bankrupt on November 11.

“You must answer for the failure of both entities that was caused, at least in part, by the clear misuse of client funds and eliminated billions of dollars owed to more than a million creditors,” the senators wrote.

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

Separately, Senators 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 banking system. traditional. exposure to turmoil in the crypto space, a largely unregulated parallel financial system.

“Crypto companies may have closer ties to the banking system than previously believed,” Warren and Smith wrote. “Banks’ relationships with crypto companies raise questions about the safety and robustness of our banking system and highlight potential loopholes that crypto companies may try to exploit to gain greater access.”

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

FTX was one of the largest cryptocurrency exchanges in the world until last month, when it faced a sudden spate of client withdrawals that it was unable to cover. One of the key questions prosecutors are likely to investigate is whether FTX misappropriated client funds when it made loans to Alameda.

Bankman-Fried has denied allegations of misuse of customer deposits. “I did not knowingly mix funds,” he told The New York Times last week. “I was frankly surprised at how big Alameda’s position was.”

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

The Times said the issue is part of a broader investigation into the FTX collapse, and it’s unclear whether prosecutors have determined any wrongdoing by Bankman-Fried.

In a statement to the newspaper, Bankman-Fried said it was “not aware of any market manipulation and certainly never intended to participate in market manipulation.”

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





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