The founder of FTX has said he will eventually testify before a congressional panel looking into his business.
Financial Services Committee Hearing
Sam Bankman-Fried responded to Rep. Maxine Waters’ request to come before the House Financial Services Committee on December 13 as it investigates the collapse of FTX last month on Twitter on Sunday, December 4.
After a purchase by competing cryptocurrency business Binance fell through, FTX filed for bankruptcy last month. Soon after, Bankman-Fried was charged with utilizing funds from FTX customers to support sister company Alameda Research. This led to a run on the exchange when investors withdrew $6 billion in a couple of days.
The fallout prompted a global surge of regulatory and criminal inquiries into the firm and Bankman Fried, including the hearing before a bipartisan House committee on December 13.
SBF Admits He “screwed up”
The former FTX CEO has already demonstrated his desire to communicate, as he met with Andrew Ross Sorkin of The New York Times at the publication’s DealBook Summit, where he was a featured speaker.
Bankman-Fried occasionally admitted during the interview that he “screwed up,” but when questioned about criminal responsibility, he found it difficult to respond.
He further claimed that what occurred at FTX was essentially a risk management issue, that the losses were money that the firm’s clients had lost on margin and that FTX was compelled to cover, and that he was permitted to cover those losses with money from other clients.
FTX War With Governments
The collapse of FTX is still causing global ripples with the current CEO engaged in back-and-forth arguments with various governments.
After FTX filed for bankruptcy last month, John J. Ray III took over as the company’s CEO. He quickly gained notoriety for declaring that FTX was the worst-run organization he had ever encountered in his 40 years of corporate turnaround experience.
But as The Wall Street Journal noted on Sunday (Dec. 3), Ray is currently at odds with authorities in a number of nations.
For instance, the Cyprus Securities Commission has objected to Ray’s decision to declare FTX bankrupt, claiming that it has hampered investigations and is preventing European clients from getting their money back.
Officials in the Bahamas, where FTX is based, have charged Ray with lying and alleged that his crew is driven by the prospect of earning substantial legal fees.
In addition, Turkish authorities have taken control of FTX’s local subsidiary’s assets, which the Wall Street Journal describes as “an affront” to Ray’s efforts to transfer all of the company’s assets to its bankruptcy proceedings.
FTX, the once-popular crypto exchange, fell apart in early November after it was discovered that FTX used customer funds to bail out its sister trading firm, Alameda Research, to the tune of about $10 billion.
The collapse has had aftershocks that may still be felt in the venture capital and cryptocurrency sectors. This has shaken investor trust in the entire industry and prompted several criminal investigations.
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