Cryptocurrency exchanges

FTX founder Sam Bankman-Fried should testify on crypto exchange collapse: Sen. Sherrod Brown

FTX co-founder Sam Bankman-Fried should testify before Congress to explain the collapse of his cryptocurrency empire, Sen. Sherrod Brown, D-Ohio, told Fox News on Tuesday.

Bankman-Fried’s FTX, the third-largest crypto trading company in the world, evaporated in a matter of days last week, leading to a bankruptcy filing and Bankman-Fried’s resignation. The former billionaire was a top donor to Democrats and is now facing criminal inquiries into mishandled funds at the company.

Brown argued that the Senate must do aggressive oversight of crypto companies moving forward but said that many senators take donations from such groups.

“It’s difficult when a whole lot of members here, particularly the more pro-bank, pro-corporate members, have taken money from crypto companies and have sung their praises in the halls of the Senate,” Brown told Fox of his efforts to crack down on crypto companies. “That’s the fundamental problem. That’s why I’m pushing, especially pushing, the [Securities] Exchange Commission (SEC) to crack down and make sure that they are held accountable for what they’ve done.”

INSIDE THE COLLAPSE OF CRYPTO EXCHANGE FTX: EVERYTHING YOU NEED TO KNOW

Sam Bankman-Fried,

Sam Bankman-Fried, founder and former chief executive officer of FTX Cryptocurrency Derivatives Exchange (Jeenah Moon/Bloomberg via / Getty Images)

Sherrod Brown

Chairman Sherrod Brown asks questions during a Senate Banking, Housing, and Urban Affairs Committee hearing on Capitol Hill, Nov. 18, 2021. (Jim Watson/AFP via Getty / Getty Images)

Asked about whether Bankman-Fried should testify, Brown said he should “at some point.”

“He has testified before, and I’m not going to pick him out, but I think that a whole lot of them have to explain what they’ve done,” he continued.

In addition to potential SEC scrutiny, FTX is facing a criminal investigation in the Bahamas, where it is headquartered.

FTX was the third-largest crypto market in the world at the start of last week when it announced liquidity problems and said it would need a massive infusion of cash to stay afloat.

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Binance, the world’s largest crypto market, initially stepped in and offered to buy the company, but it backed out of the deal after looking into FTX’s finances.

Reuters, citing two people familiar with the matter, reported that at least $1 billion of customer funds had disappeared and that people told the news outlet that Bankman-Fried had secretly transferred $10 billion of customer funds from FTX to his trading company, Alameda Research.

FTX logo and cryptocurrencies

FTX was the third-largest crypto market in the world at the start of last week when it announced liquidity problems. (Reuters/Dado Ruvic/Illustration)

The two sources told Reuters that Bankman-Fried – in a meeting that he confirmed took place – shared records with other senior executives that revealed the financial hole.

Spreadsheets reportedly showed that between $1 billion and $2 billion of the funds were not accounted for among Alameda’s assets and that the spreadsheets did not indicate where the money was moved.

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FTX is also reportedly facing potential investigations from the Justice Department and SEC.

Source: https://www.foxbusiness.com/politics/ftx-founder-sam-bankman-fried-should-testify-crypto-exchange-collapse-sen-sherrod-brown

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