United States Sens. Elizabeth Warren and Richard Durbin wrote to the former and current CEOs of FTX, Sam Bankman-Fried and John Jay Ray III, respectively, on Nov. 16 to ask for more information on the collapse of the cryptocurrency exchange. They made 13 requests for documents, lists and answers.
“The public is owed a complete and transparent accounting of the business practices and financial activities leading up to and following FTX’s collapse,” the lawmakers wrote. They provided a summary of the major press coverage of the unfolding events and reconstructed a timeline from the media sources. Noting “the apparent lack of due diligence by venture capital and other big investment funds eager to get rich off crypto” among the issues they identified, they wrote:
“These developments justify our long-standing concerns that the crypto industry ‘is built to favor scammers’ and ‘designed to reward insiders and to defraud mom-and-pop investors.’”
Warren and Durbin demand a mass of material to be provided by Nov. 28. They want “complete copies of all FTX and FTX-subsidiary balance sheets, from 2019 to the present.”
In addition, they ask for explanations of business decisions made by Bankman-Fried and statements he made on Twitter. They probe relations between FTX and Alameda Research and ask for a variety of financial accounts.
Warren and Durbin have teamed up before on crypto policy, writing to the head of Fidelity Investments to object to the inclusion of Bitcoin in one of its investment funds, for example. Warren is a vocal crypto critic, who has expressed concern for crypto mining’s energy usage, the dangers of decentralized finance and crypto’s use in ransomware attacks, among other things.
With each new day, devastating details emerge about the implosion of FTX. The public is owed a complete accounting of the practices that led to this collapse and the misuse of billions in customer funds. @SenatorDurbin and I are pushing for accountability.https://t.co/IhLdcTcGRZ
— Elizabeth Warren (@SenWarren) November 17, 2022
Commenters have noted the irony that Bankman-Fried’s father, Stanford University law professor Joseph Bankman, assisted Warren in drafting tax legislation.