House committee to investigate FTX mess this December; SBF, CZ among others to sit before panel

• The panel is bipartisan, led by the House Committee on Financial Services.
• Sam Bankman Fried’s (SBF) whereabouts are not known.
• Not all names expected to appear have been mentioned.

Committee panel wants to hear from SBF, Binance CEO and others

Early November, cryptocurrency exchange FTX’s fraudulent practices and mismanagement of customer deposits was exposed by crypto media. Subsequently, a bank-run-style withdrawal of funds from FTX kicked off. In no time, more than 1 million FTX customers lost their savings and investments. While the bank run was on, FTX abruptly suspended withdrawals leaving millions locked away from their money.

Representative Maxine Waters and Representative Patrick McHernry announced a congressional hearing slated for December to investigate the FTX collapse.

“In December, the Committee expects to hear from the companies and individuals involved, including Sam Bankman-Fried, Alameda Research, Binance, FTX, and related entities, among others,” the committee stated in a press release dated November 16th.

Rep Maxine Waters (D-CA; 43rd dist.) is the Chairwoman of the House Committee on Financial Services while Rep Patrick McHenry (R-NC; 10th dist.) is a ranking member in the committee.

“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. Unfortunately, this event is just one out of many examples of cryptocurrency platforms that have collapsed just this past year. That’s why it is with great urgency that I, along with my colleague Ranking Member McHenry, announce the Committee’s intention to hold a hearing to investigate the collapse of FTX,” Chairwoman Waters stated.

 “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. It’s essential that we hold bad actors accountable so responsible players can harness technology to build a more inclusive financial system. I appreciate Chairwoman Waters’ working with Republicans to deliver accountability through a bipartisan process,” added representative McHenry.

Amid all the mess being exposed almost on a daily basis, one can’t turn a blind eye to the actions of FTX’s competitor who announced the dumping of its entire FTT holdings after the FTX fraud was exposed. Also, the competitor backed out of a deal to buy out FTX in the eleventh hour.

Did a can of worms just open up?

SBF was one of the largest donors to Democrats prior to the midterm elections. Caroline Ellison is the daughter of SEC chair Gary Gensler’s former boss. And these are just some of the known connections. It will be interesting to see how things take a turn from now on.

At the moment, Twitter users are all over SBF. His tweets over the past week have been criticized as cryptic and irresponsible.

Nancy J. Allen is a crypto enthusiast and believes that cryptocurrencies inspire people to be their own banks and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning.

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