Fallen FTX CEO Sam Bankman-Fried is program to testify tomorrow before the Financial Services Committee of the United States House of Representatives.
The committee is investigating the events that led to the implosion of FTX, which resulted in the crypto exchange filing for bankruptcy last month. Prior to Bankman-Fried’s testimony, John J. Ray III, the new CEO of FTX, will address the House on his first panel.
The hearing, “Investigating the Collapse of FTX, Part I,” sounds like a movie title — and parts of it probably do, given how crazy this whole thing has gotten. But questions about this really arrived at FTX may remain unanswered; even if Bankman-Fried is to testify, there are still concerns that he may have cold feet.
Last week, in an exchange of tweets, California Rep. Maxine Waters, chair of the House Financial Services Committee, invited Bankman-Fried to join the Dec. 13 hearing. Bankman-Fried actually refused.
This did not sit well with Waters, who noted that Bankman-Fried had been on a personal media tour, publicly speaking to bands ranging from “Good Morning America” to the BBC.
Amid the possibility of a congressional subpoena to compel his attendance, Bankman-Fried tweeted to Waters on December 9 that he is “ready to testify”, adding: “[T]here’s a limit to what I can say, and I won’t be as helpful as I would like. He claimed he didn’t have access to “a lot” of his data.
Although he’s dodged many questions from reporters, Bankman-Fried has been quite talkative in recent weeks. Maybe when he is sworn before the US government it will be a different story.
Anyway, Bankman-Fried said in a Tweeter he’ll “try to be helpful” (after saying he won’t be as helpful as he would like) and talk about FTX US’ alleged creditworthiness, resolutions to return value to users internationally, what he thinks led to the crash, and his “own flaws”.
Last month, FTX’s bankruptcy hearings began in the US Bankruptcy Court for the District of Delaware.
James Bromley, a partner at Sullivan & Cromwell and co-head of the firm’s global restructuring practice, told the hearing that FTX “whitewashed the world” in places such as Berkeley, Calif.; Hong Kong; Miami; Chicago; and the Bahamas.
Days before the initial bankruptcy hearing, in a Nov. 17 filing with the same court, Ray, who was brought in to clean up the Enron scandal, said there was a “complete lack of information reliable financials”.
“Never in my career have I seen such a complete failure of corporate controls and such a complete absence of reliable financial reporting as has happened here,” Ray said at the time.
Tomorrow’s hearing is the first in a long series with the Chamber that aims to find out what happened internally that brought about the downfall so hard and so fast of one of the largest centralized crypto exchanges in the world. .