House Republicans are scrutinizing the SEC investigation into failed crypto exchange
- Top House GOP members requested communications from the SEC about the arrest of former FTX founder Sam Bankman-Fried before his scheduled testimony before the House Financial Services Committee.
- The committee will launch an investigation into the timing of the charges against Bankman-Fried.
Rep. Patrick McHenry, a Republican from North Carolina and ranking member of the House Financial Services Committee, speaks at a hearing in Washington, DC
Andrew Harrer | Bloomberg | Getty Images
Top House Republicans sent a letter to the Securities and Exchange Commission on Friday as Congress investigates the agency’s actions against Sam Bankman-Fried, the former CEO of failed cryptocurrency exchange FTX.
In a letter addressed to SEC Chairman Gary Gensler, Representatives Patrick McHenry, RN.C., chairman of the House Financial Services Committee, and Bill Huizenga, chairman of the Oversight and Investigations Subcommittee, demanded records and communications between and among the SEC’s enforcement division, the Department of Justice and Gensler’s office about the timing of the allegations against Bankman-Fried of defrauding its investors and other violations.
Bankman-Fried was scheduled to testify before the committee on December 13, a day after he was arrested by Bahamian officials. FTX filed for Chapter 11 bankruptcy and Bankman-Fried stepped down as CEO in November. He was indicted by a New York federal court on December 9 and arrested three days later pending extradition to the United States
Current FTX CEO John Ray testified alone in Bankman-Fried’s absence.
The committee’s request comes a week after McHenry announced that the panel would investigate certain so-called overreach by financial regulatory agencies.
“Presumably, the SEC’s Division of Enforcement conducted a full investigation of the actions of Sam Bankman-Fried and presented its findings to the Commission for its review and to approve the charges,” the letter said. “Still, the timing of his indictment and arrest raises serious questions about the SEC’s process and cooperation with the Justice Department.”
The Financial Services Committee requested communications between the SEC’s enforcement division, particularly its director, Gurbir Grewal; communications between Gensler’s direct employees and registries and communications between the SEC and the Department of Justice over the past few months by 17.00 on 23 February.
