U.S. Congressman Blames SEC Chair Gary Gensler and SBF for FTX Collapse

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Minnesota Rep. Gary Gensler and SBF for FTX’s collapse. 

Minnesota Rep. Thomas Earl Emmer has blamed both SEC Chairman Gary Gensler and Sam Bankman-Fried for FTX collapse. In a recent interview with Fox Business, Emmer noted that the exchange’s collapse is not a crypto failure, but that of Gensler, Bankman-Fried, and centralized finance. 

“FTX’s collapse is not a crypto failure. It’s a failure with CeFi, @GaryGensler, and Sam Bankman-Fried. Decentralization is the point,” Rep. Emmer said in a tweet. 

FTX’s collapse is not a crypto failure. It’s a failure with CeFi, @GaryGensler, and Sam Bankman-Fried. Decentralization is the point. Watch below for more thoughts 👇 pic.twitter.com/VYacafc0ZD

— Tom Emmer (@RepTomEmmer) November 22, 2022

Emmer Puts Gensler and SBF on Blast

Furthermore, the United States congressman also said the FTX collapse is a failure of government oversight and regulatory proceedings. Rep. Emmer, who was recently appointed Republican majority whip, referred to a March 23 meeting between the former CEO of FTX Bankman-Fried and Gensler. 

“They were working with Sam Bankman-Fried and others to give them special treatment from the SEC that others aren’t getting,” he said. 

The congressman added that Gensler is supposed to be investigating these cryptocurrency firms and not dealing with “the bad guys,” and asking about Gensler’s whereabouts when Celsius, Voyager, Terra, and FTX collapsed. 

He wondered why Gensler would be going after the “good actors” in the crypto space while “working backroom deals with people doing nefarious things.” 

“We need to get to the bottom of this—we need to understand why Gary Gensler and the SEC were not doing their job,” Emmer said. 

FTX’s Woes

Rep Emmer did not spare SBF in the recent interview. He said SBF was busy pushing for special treatment legislation through Congress. However, things fell apart for the former CEO and founder of FTX after crypto stakeholders raised red flags, Emmer added. 

Recall that Binance had accused FTX of lobbying behind industry players, which prompted the world’s largest exchange to announce that it would liquidate its FTT position worth over $500 million. Binance’s announcement gave the warning sign that FTX was facing serious issues, as users of the collapsed exchange hurriedly tried to move their funds. 

The withdrawal requests overwhelmed FTX, forcing the exchange to agree to sell itself to Binance. Hours later, Binance announced that it will no longer purchase FTX due to the exchange’s alleged mishandling of customers’ funds and corporate due diligence. FTX subsequently filed for Chapter 11 bankruptcy protection, and a new management team took over the company’s affairs.  

As reported, FTX’s current legal advisor on restructuring efforts, Alvarez & Marsal North America, said the cryptocurrency exchange has $1.24 billion in cash balance. Alvarez & Marsal North America said the cash balance came from FTX and its vast web entities, adding that the funds are being held in different financial institutions. However, the fund is not enough to settle the FTX’s top 50 creditors, to which the exchange currently owes $3.1 billion. 

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