Sam Bankman-Fried haunts the halls of Congress, lawmaker says

It’s not Halloween, but crypto critic Rep. Brad Sherman, D-Calif., is seeing ghosts.

Sherman conjured the ghost of Sam Bankman-Fried, the former CEO of failed crypto exchange FTX, during a hearing focused on regulatory gaps in digital asset market structure on Thursday.  

“His ghost is still in this room. He haunts the halls of Rayburn,” Sherman said, referencing the Rayburn House Office Building in which the hearing was held. “But let’s remember why he was here. For one reason: To prevent the SEC from having jurisdiction over cryptocurrency.”

Bankman-Fried has pleaded not guilty to criminal charges, including bank fraud and illegal campaign contributions, that are tied to his role at the helm of FTX. Before his arrest, Bankman-Fried had pressed lawmakers to pass a digital commodities regulation bill and often visited Washington, D.C.

‘Nobody elected Sam Bankman-Fried’

The Thursday afternoon hearing was held by the House Financial Services Committee’s Subcommittee on Digital Assets, Financial Technology and Inclusion. During his remarks, Sherman said that Bankman-Fried was seeking “baby regulation” for crypto through the Commodity Futures Trading Commission rather than the Securities and Exchange Commission.

“All the money and power in this town is on the pro-crypto side because crypto bros make money literally by making money and they’ve made over a trillion dollars out of thin air,” Sherman said. “They’ll accuse the U.S. government of making money out of thin air. Maybe we do, but we’re the U.S. government. What we’re able to do benefits the American people in a democratic system. Nobody elected Sam Bankman-Fried.”

A Bankman-Fried spokesperson declined to comment.

Later in the hearing, Rep. Byron Donalds, R-Fla., pushed back on Sherman’s assertion that Bankman-Fried’s alleged crimes were specific to cryptocurrency, rather than more traditional fraud. 

“I found it interesting that now Sam Bankman-Fried is now the ghost of Christmas past. You know, what happened to FTX is unconscionable, never tolerated, but that’s accounting fraud,” Donalds said.

Disclaimer: The former CEO and majority shareholder of The Block has disclosed a series of loans from former FTX and Alameda founder Sam Bankman-Fried.

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