Update (1830ET): The House Financial Services Committee confirmed that former FTX Chief Executive Officer Sam Bankman-Fried will testify at a hearing next week on the disintegration of his crypto exchange and hedge fund.
Bloomberg reports that Bankman-Fried will testify virtually.
He is now listed as a witness alongside current FTX CEO John J. Ray III, according to a media advisory the committee sent out late Friday. This should be fun since Ray described FTX’s collapse in recent court filings as an “unprecedented debacle” brought on by a culture of lax corporate governance.
“Never in my career have I seen such a complete failure of corporate controls and such a complete absence of trustworthy financial information as occurred here,” Mr. Ray said in the filing.
The hearing will be split into two parts, each one featuring one of the men.
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Update (0720ET): Having missed yesterday’s deadline to respond to a request to testify at an upcoming Senate Committee hearing, Sam Bankman-Fried
1) I still do not have access to much of my data — professional or personal. So there is a limit to what I will be able to say, and I won’t be as helpful as I’d like.
But as the committee still thinks it would be useful, I am willing to testify on the 13th. https://t.co/KR34BsNaG1
— SBF (@SBF_FTX) December 9, 2022
He continued…
2) I will try to be helpful during the hearing, and to shed what light I can on:
FTX US’s solvency and American customers
Pathways that could return value to users internationally
What I think led to the crash
My own failings
3) I had thought of myself as a model CEO, who wouldn’t become lazy or disconnected.
Which made it that much more destructive when I did.
I’m sorry. Hopefully people can learn from the difference between who I was and who I could have been.
Presumably there is zero chance he will testify in person.
Does anyone believe this is anything but stalling for time?
Meanwhile, Binance founder ‘CZ’ went off on Twitter overnight, lambasting Kevin O’Leary’s ‘woe is me’ tale of wrongdoing by SBF, and detailing the attacks he himself suffered at the hands of the inclusive left’s (second) favorite donor:
As an early investor in FTX, we became increasingly uncomfortable with Alameda/SBF and initiated the exit process more than 1.5 years ago.
Sam was so unhinged when we decided to pull out as an investor that he launched a series of offensive tirades at multiple Binance team members, including threatening to go to “extraordinary lengths to make us pay” – we still have those text messages.
Shortly after that Sam began “investing” in friends in high places – from media, to policymakers, to celebrities (like Kevin). And he used that network to manipulate public opinion, including attacking me and others in the industry.
My ethnicity was a focus of those attacks and @kevinolearytv signaled his intention to continue those attacks in the media and will likely repeat them at next week’s Senate hearing. I’m Canadian and Binance is not a Chinese company.
You don’t have to be a genius to know something don’t smell right at FTX. They were 1/10th our size, yet outspent us 100/1 on marketing & “partnerships”, fancy parties in the Bahamas, trips across the globe, and mansions for all of their senior staff (and his parents).
Which appears to have pissed SBF off…
You won, @cz_binance.
There’s no need to lie, now, about the buyout.
We initiated conversations around buying you out, and we decided to do it because it was important for our business.
And while I was frustrated with your ‘negotiation’ tactics, I chose to still do it.
— SBF (@SBF_FTX) December 9, 2022
But hey, he did say he was sorry, right?
As CoinTelegraph’s Martin Young detailed earlier, Crypto’s public enemy number one, Sam Bankman-Fried has missed a crucial deadline to confirm his appearance at an upcoming Senate Committee hearing.
The former FTX CEO missed a Thursday 5:00 pm ET on Dec. 8 deadline for responding to a Senate Banking Committee request that he testify at the Committee meeting on Dec. 14. This has set up the possibility of a congressional subpoena.
On Dec. 8, the Chairman of the Senate Committee on Banking, Housing, and Urban Affairs, Sherrod Brown, and ranking member of the Committee, Senator Pat Toomey, released a statement on the request.
“FTX’s collapse has caused real financial harm to consumers, and effects have spilled over into other parts of the crypto industry. The American people need answers about Sam Bankman-Fried’s misconduct at FTX,” they stated before adding:
“The Committee has requested that he testify at our upcoming hearing on FTX’s collapse, and will consider further action if he does not comply.”
According to the official Committee website, the hearing titled “Crypto Crash: Why the FTX Bubble Burst and the Harm to Consumers” will be webcast on Dec. 14.
So far, two witnesses have been confirmed to attend the hearing — including American University Washington College of Law professor Hilary J. Allen and actor and author Ben McKenzie Schenkkan.
Allen is an academic whose research focuses on the impact of new financial technologies on the stability of the financial system.
Schenkkan is an anti-crypto actor-turned-commentator who played a troubled teenager on a U.S. television series called “The O.C.”
Messari founder Ryan Selkis commented on the futility of the witness selection:
The Senate Banking FTX hearing is a complete goat rodeo and mockery of the system.
I offered to go even though it would have been a distraction, but instead the Senate opted for the former child star of the OC and a “never crypto” academic.
Another waste of taxpayer $$$.
— Ryan Selkis 🥷 (@twobitidiot) December 9, 2022
Meanwhile, Cointelegraph has reached out to Schenkkan for comment but did not receive a response at the time of publication.
Other than the Dec. 14 Senate Banking Committee hearing, Bankman-Fried has also been requested to attend a separate hearing called “Investigating the Collapse of FTX” on Dec. 13 with the U.S. House Financial Services Committee.
Bankman-Fried was first requested to attend the hearing via a tweet from Congresswoman Maxine Waters but seemingly declined the invitation on Dec. 5, stating that he wasn’t sure what would happen by the hearing date, “but when it does, I will testify.”
Waters responded on Dec. 8 stating “a subpoena is definitely on the table” should Bankman-Fried fail to voluntarily testify at the hearing.
The collapse of SBF’s FTX empire has initiated a tsunami of backlash from U.S. lawmakers and regulators threatening to drown the fledgling crypto asset industry.
Tyler Durden
Fri, 12/09/2022 – 18:25
