Sam Bankman-Fried, the founder of now-bankrupt crypto exchange FTX, agreed to testify before the House Financial Services Committee next week as questions and confusion swirl about the collapse of his companies.

Key Takeaways

  • FTX founder Sam Bankman-Fried agreed to testify before the House Financial Services Committee after Representative Maxine Waters said a subpoena was “on the table.”
  • Questioning will likely involve whether FTX executives diverted customer funds to bad investments.
  • Bankman-Fried denies intentional wrongdoing and blames the crash on poor bookkeeping.

On Twitter, Bankman-Fried said he would “shed some light” on what he believes led to the demise of his organization, as well as address the solvency of the U.S. subsidiary and his own “failings.”

Maxine Waters, the California Democrat who chairs the House Financial Services Committee, invited Bankman-Fried to appear before her panel on December 13. In his initial rejection, Bankman-Fried indicated he would wait until he had fully learned and reviewed what happened before appearing. 

On Dec.7, Sherrod Brown, the Senate Banking Committee chairman, asked Bankman-Fried to testify and said they were prepared to issue a subpoena if Bankman-Fried did not appear voluntarily. Waters also supported this possibility, saying, “A subpoena is definitely on the table.”

There will likely be a lot of questions at the December 13 hearing about whether FTX executives diverted customer funds to bad investments. In interviews over the past week, Bankman-Fried has discussed his role in the collapse of FTX without revealing how things went wrong or who was responsible. In fact, he seems to have admitted that cryptocurrency held by customers in accounts that should not have been available to FTX was commingled with other investors’ assets on its main international exchange but not its U.S. operation. He has also blamed poor bookkeeping and financial controls.

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