FTX founder Sam Bankman-Fried tried to receive “special treatment” with the Securities and Exchange Commission in his meetings with the financial watchdog and pushed for legislation for the crypto industry with the same goals, says U.S. Rep. Tom Emmer (R-MN).
The lawmaker said the SEC's failure to avert the catastrophe has raised "major questions."
“They were working, apparently, with Sam Bankman-Fried and others, to give them special treatment from the SEC that others aren’t getting,” Emmer said.
“Sam Bankman-Fried was pushing special-treatment legislation through Congress. When it was finally revealed what it was, and the industry started raising red flags all over the place, that’s when this thing came apart,” he added.
Emmer said SEC Chair Gary Gensler has not safeguarded investors against such disasters, such as the repercussions of Celsius, Voyager and Terra earlier this year.
“What is the regulator doing going after good actors in the community, and working backroom deals, it appears, with people who are doing nefarious things?” he said.
Bankman-Fried responded, telling Benzinga, "Neither FTX US nor FTX International were primarily regulated by the SEC. However, FTX US is, to my knowledge, solvent and without the issues that FTX International has; FTX International doesn't take US customers and isn't a US business."
"So, to my knowledge, no customers in US regulators' jurisdictions were impacted by this," Bankman-Fried added.
Congressmembers Attempt To Stop The SEC's Investigation Of FTX
Meanwhile, according to a report by The American Prospect, Emmer was one of the members of Congress who previously attempted to halt the SEC's investigation of FTX.
Eight House members — four Democrats and four Republicans — wrote a letter in March questioning the SEC's power to contact cryptocurrency and blockchain companies informally and hinting the queries might be illegal under federal law.
The letter was led by Emmer, who was recently elected by the Republican caucus to the role of majority whip, the third position in the House GOP leadership.
In a March 2022 Twitter thread, Emmer wrote, “My office has received numerous tips from crypto and blockchain firms that SEC Chair @GaryGensler’s information reporting ‘requests’ to the crypto community are overburdensome, don’t feel particularly … voluntary … and are stifling innovation.”
Photo: Courtesy of Bybit on flickr.