The pressure eventually paid off.
Sam Bankman-Fried, the fallen founder of bankrupt cryptocurrency exchange FTX, will finally take a break from his media offensive to answer questions from lawmakers.
After initially declining an invitation from Congress, he simply reluctantly accepted it, bowing under threat of a subpoena. He will appear before the House Financial Services Committee on December 13 for a hearing focused on the fall of his empire.
This crypto group was made up of FTX and Alameda Research, a hedge fund that also created a trading platform.
Bankman-Fried filed for Chapter 11 bankruptcy on Nov. 11 after both companies ran out of cash.
“I am ready to testify”
“I still don’t have access to a lot of my data – business or personal,” the former trader wrote on Dec. 9. “So there’s a limit to what I can say, and I won’t be as helpful as I would like.”
“But as the committee still thinks it would be helpful, I am ready to testify on the 13th.”
He then gave the points on which he intends to respond during this hearing, as if he were the one who would lead it.
“I will try to be helpful during the hearing and shed as much light as possible on:
— Creditworthiness of FTX US and US customers
— Channels that could bring value to users globally
— What I think led to the accident
— My own flaws,” he said in another post.
He ended with a message of apology and humility, which resembles what he has said in his various interviews since November 30.
“I thought of myself as a model CEO, who wouldn’t get lazy or disconnected. Which made it even more destructive when I did. I’m sorry. I hope people can learn the difference between who I was and who I could have been.”
Bankman-Fried appears to be telling lawmakers that he won’t have anything more to say to them than what he has said in his interviews.
“I made a lot of mistakes,” he said in his interview with The New York Times/DealBook. “There are things I would give anything to do again. I never tried to deceive anyone.”
As authorities try to figure out how a company like FTX, valued at $32 billion in February, could have collapsed within days, the former trader has embarked on a media tour to explain that what happened was due to bad luck.
Rep. Maxine Waters (D-California), chair of the House Financial Services Committee, invited the fallen former crypto king to appear before the panel on Dec. 13.
“@SBF_FTX, we appreciate you being candid in your discussions about what happened at #FTX,” the congresswoman wrote on Twitter on Dec. 2. “Your willingness to speak to the public will help customers, investors and companies. To that end, we would welcome your participation in our hearing on the 13th.”
Bankman-Fried, who was the institutional face of crypto and spent a lot of time lobbying in Washington for the sector, seemed in no rush to take up the invitation.
“Rep. Waters and the House Committee on Financial Services: Once I am done learning and looking into what happened, I would feel like it was my duty to appear before the committee and explain myself,” SBF replied on December 4. I’m not sure that will happen by the 13th. But when it does, I will testify.
A subpoena on the table
The next day, Waters almost begged him to honor the invitation.
“Based on your role as CEO and your interviews with the media over the past few weeks, it is clear to us that the information you have so far is sufficient to testify,” the MP replied on December 5. .
“As you know, the collapse of FTX injured more than one million people. Your testimony would not only be meaningful to members of Congress, but also essential to the American people.”
Waters ended his plea by telling Bankman-Fried, “It is imperative that you attend our hearing on the 13th, and we are willing to schedule continuing hearings if there is more information to share later.”
That didn’t convince the former trader, who resides in the Bahamas, to make the trip to Washington. It took Waters the threat of a Dec. 7 subpoena to get Bankman-Fried to agree to appear before lawmakers.
“A subpoena is definitely on the table. Stay tuned,” the MP said.
Bankman-Fried, who has spent much of his time in Washington influencing politicians and regulators on industry regulation, will return to this city with a different status: that of someone about whom there are strong suspicions of fraud. He is no longer the big fundraiser who has donated to politicians’ campaigns.
There is particular pressure on members of Congress in this case because Bankman-Fried was a major donor to the Democratic Party but also Republicans.
The general public wants to see how their lawmakers will handle this matter as they have often received donations from the former king of crypto, now dubbed the Bernie Madoff of the crypto space on social media.