Gensler fails to protect public from FTX collapse

Congressman Ritchie Torres has written a letter to the Government Accountability Office calling for an investigation into the SEC handling of FTX.

With the very public collapse and ensuing loss of investor funds, the FTX debacle is one of the biggest losses in crypto thus far. Could the Securities and Exchange Commission and its chairman Gary Gensler have done more to prevent such an occurrence?

Democratic representative Ritchie Torres certainly thinks so, and he has written a letter to the Government Accountability Office asking it to look into the conduct of Gensler’s agency in relation to FTX, stating that the crash could have been avoided had the SEC intervened in a timely manner.

NEW this morning — Rep. @RitchieTorres (D-NY) calls on the Government Accountability Office (@USGAO) to investigate the SEC’s “failure to protect the investing public from the egregious mismanagement and malfeasance of @FTX_Official” pic.twitter.com/BdT7ZVCM7X

— Alexander Grieve (@AlexanderGrieve) December 7, 2022

In the letter, Congressman Torres highlights what he says was the failure of the SEC to protect the investing public from billions of dollars in losses from the “egregious mismanagement and malfeasance of FTX.” He wrote:

“Chair Gary Gensler, by the logic of his own public pronouncements, is singularly responsible for the regulatory failures surrounding the collapse of FTX, and its affiliate FTX US. Chair Gensler has said on countless occasions that there is no need for authorizing legislation from Congress: the SEC presently possesses the authority it needs to regulate cryptocurrency exchanges.”

He added:

“If the SEC has the authority Mr Gensler claims, why did he fail to uncover the largest crypto Ponzi scheme in US history?” 

Congressman Torres went on to accuse the SEC of dedicating “scarce time and resources” in investigating Kim Kardashian rather than crypto exchanges. In this regard he charged the agency with seeking publicity at the expense of protecting the investing public.

The Congressman ended the letter by referring to the “fundamentally demoralized” career staff at the SEC who, according to the SEC Inspector General, had suffered the “highest attrition rate in a decade.” Torres asked to what extent Gensler’s demoralization of his workforce had contributed to the agency’s duty to protect investors.

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.