Sam Bankman-Fried responded to a series of tweets from the chairman of the US House of Representatives Financial Services Committee.
The former CEO of failed crypto exchange FTX said in a tweet that he is ready to testify before the US Congress next week but he will be limited in what he can say and he “wouldn’t be helpful” as he wants to be.
The tweet on Friday came in response to a number this month from Maxine Waters, chair of the Financial Services Committee in the House. She asked Sam Bankman-Fried to attend next week’s hearings on the collapse of FTX.
Waters, a California Democrat, said in a series of tweets to Bankman-Fried that, based on numerous media interviews since the fall of FTX, “it is clear to us that the message is The trust you have so far is sufficient as proof.”
FTX failed last month is basically a cryptocurrency version of banking. The company’s clients tried to withdraw all of their assets immediately because of growing doubts about the financial strength of the company and its affiliated commercial arm, Alameda Research. Since the collapse, the new management of FTX has called the management of the crypto exchange “complete failure of the company’s control“.
Bankman-Fried has acknowledged his own failures in averting the collapse.
In a series of tweets to Waters, Bankman-Fried listed specific issues he could discuss with the committee, including the solvency of FTX’s US business, US customers of FTX and possible solutions to return assets to international customers. He also said he could talk about what he thought led to the crash and “my own failures”.
Bankman-Fried said he was responsible for the collapse of FTX and acknowledged that he failed to grasp the extent of the risk that FTX and Bermuda-based Alameda are taking on both businesses. One of the allegations against Bankman-Fried was that he arranged for Alameda to use client assets in FTX to bet on the market. Bankman-Fried has said in public interviews that he did not “intentionally” mix client assets with Alameda.
Exchanges like FTX are supposed to separate customer deposits from any bets they place on the market. Other financial companies have also been in trouble for abusing customer deposits, such as MF Global about 10 years ago.
In a televised interview just over a week ago, Bankman-Fried said he largely believes FTX’s US branch is fully solvent and can start processing withdrawals immediately. ie. For the rest of FTX, which is significantly larger than the US division, he said the fate of customers’ funds is largely out of his control.
Bankman-Fried, who was once one of the richest people in the world on paper, now says he’s making a living off a single credit card and is likely to have $100,000 less in the wake of the FTX debacle .
Waters has said that the FTX collapse has “harmed more than a million people” and tweeted on Tuesday that if Bankman-Fried is not willing to testify, the subpoena “will certainly be on the table.”