Jannah Theme License is not validated, Go to the theme options page to validate the license, You need a single license for each domain name.
Usa News

US lawmakers set to grill Sam Bankman-Fried over FTX collapse


New York
CNN

With his vast crypto empire in shambles, Sam Bankman-Fried is preparing to be grilled by US lawmakers demanding answers about how his digital asset exchange, FTX, collapsed, leaving at least a million customers unable to access their funds.

Bankman Fried tweetedf Friday that he was set to appear before the House Financial Services Committee on Tuesday, which is investigating the crypto industry titan’s dramatic collapse last month.

The 30-year-old entrepreneur, who resigned as CEO at the same time as FTX and dozens of affiliates filed for bankruptcy, said there will be a “limit to what I can say, and I won’t be as helpful as I’d like,” in response to Rep. Maxine Waters, the committee’s Democratic chair. “But since the committee still thinks it would be helpful, I’m prepared to testify on the 13th.”

John Ray, a seasoned restructuring expert who was tasked with guiding FTX through bankruptcy as its new chief executive, will also testify on Tuesday.

“The scope of the ongoing investigation is huge,” Ray said in prepared remarks released Monday.

Although the investigation is not complete, Ray said, the collapse of FTX appears to stem from the concentration of power “in the hands of a very small group of grossly inexperienced and unsophisticated individuals” who have virtually no implemented no corporate controls.

Ray also states that “FTX.com client assets were mixed with assets from the Alameda trading platform.” This is a key issue for investigators, as FTX and Alameda were, on paper, separate entities.

Bankman-Fried has publicly stated that he never “knowingly” mixed funds.

A representative for Bankman-Fried’s attorney said the FTX founder would testify remotely from the Bahamas, where the company was based.

The representative declined to say whether Bankman-Fried would also testify before a Senate Banking Committee hearing on Wednesday.

Tuesday’s hearing is scheduled to begin at 10 a.m. ET.

Addressing Congress is familiar ground for the crypto celebrity-turned-outcast, who had cultivated a reputation as the industry’s Good Guy in Washington. He and other FTX executives have made lavish political and charitable donations while advocating for legislation that would clarify the regulatory boundaries of the digital asset space.

During FTX’s heyday, Bankman-Fried regularly appeared on congressional panels, charming lawmakers and pushing for light regulation of the fledgling industry. Bankman-Fried himself gave about $40 million to campaigns and political action committees, largely backing Democrats, during the 2022 midterm election cycle, according to Federal Election Commission records. .

This time around, however, it is unlikely to receive the same warm reception, as lawmakers and lobby groups that had aligned themselves with FTX strive to distance themselves from one of the corporate implosions. the most shocking in history.

In the weeks since his businesses collapsed, multiple investigations, including a criminal probe into FTX and its sister hedge fund, Alameda, began and could lead to charges against Bankman-Fried, legal experts say. At the same time, SBF regularly tweeted and gave interviews to the media, portraying himself as a somewhat clumsy but ultimately well-meaning general manager who came out on his skis.

“I did not knowingly commit fraud,” he told the BBC over the weekend. “I didn’t want any of this to happen. I was certainly not as competent as I thought.

That sentiment echoes statements he’s made previously at the New York Times’ DealBook summit and in an interview with ABC’s “Good Morning America.”

His congressional testimony, however, carries additional legal weight.

“SBF puts itself in danger testifying before Congress,” said Howard Fischer, a former Securities and Exchange Commission attorney. “”Anything SBF says that is contradicted by documentary evidence or the statements of other people will be grounds for doubting its credibility.

Additionally, Fischer says, if his testimony before Congress is “substantially challenged” by other evidence, Bankman-Fried “could also face charges on that matter.”

Despite SBF’s media tour, he largely escaped the details of how the wheels came out of FTX, once valued at over $30 billion. In early November, when a prominent investor publicly announced that he would be liquidating his holdings in FTX, it sparked a panic that amounted to a run on the bank. FTX faced such a severe liquidity crunch that it was forced to file for bankruptcy less than a week later.

In a tweet last week, Bankman-Fried said he was “shedding as much light as possible” including what he believes led to the crash and his own failures as CEO.

The main issues that lawmakers and prosecutors should focus on relate to the potential misuse of client funds.

“The questions will all be about the mix of assets,” said David Maria, head of litigation and regulatory affairs at crypto exchange Bittrex… “I think there’s going to be a lot of, ‘I don’t remember no, I don’t know, I don’t have access to those files.’ ”

Ray, the new CEO who is due to testify before Bankman-Fried, may be able to offer more in-depth insight into lawmakers’ questions given his access to company financial records and his unique insight into how the business was run, Maria said.

One of the key questions about FTX stems from a Reuters report last month that says Bankman-Fried built a “backdoor” into FTX’s accounting system, allowing it to alter the company’s financial records without trigger accounting red flags, as this Reuters report said. Bankman-Fried used this “backdoor” to transfer $10 billion of FTX client funds to Alameda, the hedge fund, and now at least $1 billion is missing.

Bankman-Fried denied knowledge of any such backdoor. “I don’t even know how to code,” he told cryptocurrency vlogger Tiffany Fong in an interview last month.



Cnn All

Not all news on the site expresses the point of view of the site, but we transmit this news automatically and translate it through programmatic technology on the site and not from a human editor.
Back to top button