FTX's Sam Bankman-Fried to Testify Before US House Committee Next Week

FTX filed for bankruptcy last month and Sam Bankman-Fried stepped down as chief executive.

By Reuters | Updated: 10 December 2022 10:34 IST

FTX's Sam Bankman-Fried to Testify Before US House Committee Next Week

Photo Credit: Reuters

Traders pulled $6 billion (roughly Rs. 50,000 crore) from FTX in three days

Highlights

Binance abandoned a deal to rescue FTX from bankruptcy
Prosecutors, regulators have not charged Bankman-Fried with any crime
FTX transferred large sum of money to Bahama around its collapse

FTX's Sam Bankman-Fried is set to testify before a US House committee on Tuesday, the cryptocurrency exchange's founder and the congressional panel said on Friday, as regulators investigate his role in the wake of its collapse.

The chair of the House of Representatives Committee on Financial Services, Maxine Waters, told Reuters on Thursday that she was prepared to subpoena Bankman-Fried if he did not agree to appear before the panel, which is holding a hearing as part of its probe into FTX.

In a statement late on Friday, the panel said it would hear from newly appointed FTX CEO John Ray and from Bankman-Fried, FTX's founder and former CEO, on Tuesday.

FTX's Sam Bankman-Fried to Face Market Manipulation Inquiry: Report

"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," Bankman-Fried said on Friday on Twitter.

"But as the committee still thinks it would be useful, I am willing to testify on the 13th," he added.

The hybrid hearing is scheduled for 10am ET (8:30pm IST) on Tuesday, the committee said.

BTC, ETH, Majority Cryptocurrencies Witnessed Losses Today

In recent weeks, US authorities have sought information from investors and potential investors in FTX, two sources with knowledge of the requests told Reuters. Prosecutors and regulators have not charged Bankman-Fried with any crime.

US Justice Department officials met this week with FTX's court-appointed overseers to examine whether hundreds of millions of dollars were improperly transferred to the Bahamas, where FTX is based, around the same time that the crypto exchange filed for bankruptcy in Delaware, Bloomberg reported late on Friday.

Both FTX and the Justice Department did not immediately respond to Reuters' requests for comment on the report.

Battling crypto pioneers

FTX filed for bankruptcy last month and Bankman-Fried stepped down as chief executive, after traders pulled $6 billion (roughly Rs. 50,000 crore) from the platform in three days and rival exchange Binance abandoned a rescue deal.

Reuters detailed last month the bitter rivalry between Bankman-Fried and Binance Chief Executive Changpeng Zhao, who in the months before FTX's downfall had competed for market share.

Public tension between the two erupted again on Friday after a string of tweets by Zhao.

Zhao said that after Binance, an early investor in FTX, sought to exit its stake over one-and-a-half years ago, Bankman-Fried made "offensive tirades" against Binance team members.

Binance sold back to FTX its stake in the company last year.

In reply, Bankman-Fried wrote: "We initiated conversations around buying you out, and we decided to do it because it was important for our business."

"You threatened to walk at the last minute if we didn't kick in an extra ~$75m (roughly Rs. 600 crore)," he added. "You didn't even have the rights to pull out as an investor unless we chose to buy you out—much of the tokens/equity were still locked."

"Not that it matters now. You also can't force us to sell if we don't want to," Zhao replied.

"It was never a competition or fight. No one won."

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