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House panel wants internal documents from bankrupt crypto exchange FTX

<i>Graeme Sloan/Bloomberg/Getty Images</i><br/>
Bloomberg via Getty Images
Graeme Sloan/Bloomberg/Getty Images

By Matt Egan

A powerful subcommittee in the House of Representatives is seeking internal documents and communications from Sam Bankman-Fried and FTX to understand how the crypto exchange collapsed so suddenly and what is being done to recover customer funds.

FTX, formerly one of the most trusted brands in crypto, filed for bankruptcy last week and announced the resignation of Bankman-Fried, its 30-year-old CEO who lost a fortune.

In a Friday letter, Democratic Rep. Raja Krishnamoorthi, chairman of the Oversight Committee’s Subcommittee on Economic and Consumer Policy, said he is “extremely troubled” by the FTX bankruptcy and the “potentially significant harm” it will cause to American consumers and investors.

Krishnamoorthi is requesting detailed information on the liquidity crisis facing FTX, the sudden decision to declare bankruptcy and what the company plans to do to “ensure that every single dollar is returned to American consumers who placed their trust in your company.”

The subcommittee, which had already launched an investigation into the crypto industry in August, asked for information and documents by December 1, including all internal documents and communications since 2021 related to FTX’s liquidity problems, balance sheet, customer funds, cryptocurrency holdings, money owed to customers and handling of customer funds.

“FTX investors and the American people demand answers,” Krishnamoorthi said.

Neither FTX nor a lawyer representing Bankman-Fried responded to a request for comment.

The letter cited revelations by newly-installed FTX CEO John J. Ray, who in court filings this week described a “complete failure” by the crypto company to maintain financial controls. Ray said the failures at FTX eclipse even that of Enron, the infamous company whose liquidation he oversaw in the early 2000s.

Krishnamoorthi said he’s “distressed” comments Bankman-Fried has made since the FTX bankruptcy, including an interview with Vox this week where the former FTX boss said he “didn’t mean” to “do sketchy stuff,” but that “each individual decision seemed fine and I didn’t realize how big their sum was until the end.”

Bankman-Fried was a face of the crypto industry and had emerged as a white knight for struggling companies. He was also a leading campaign contributor to Democrats during the 2022 election cycle.

Earlier this week, Democratic Sens. Elizabeth Warren and Dick Durbin demanded FTX and Bankman-Fried turn over a trove of documents that will shed light on the collapse, including balance sheets and details on bailouts given to other crypto firms.

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