FTX Founder Dodges Subpoena, Agrees to Testify to House Panel

Former FTX CEO Sam Bankman-Fried at a congressional hearing

Alex Wong - Getty Images

Sam Bankman-Fried, the founder and former CEO of FTX, will testify Dec. 13 at a congressional hearing related to the collapse of the crypto exchange.

Key Takeaways

  • FTX founder Sam Bankman-Fried agreed to testify before the House of Representatives' Financial Services Committee after its chairman, Rep. Maxine Waters, said a subpoena was “on the table.”
  • Questioning will likely revolve around whether FTX executives diverted customer funds to bad investments.
  • Bankman-Fried denies intentional wrongdoing and blames the crash on poor bookkeeping.

There has been much discussion in Washington over whether Bankman-Fried would be subpoenaed, but he tweeted Friday that he would voluntarily testify because the House Financial Services Committee "still thinks it would be useful." It was unclear whether he would come to the U.S. Capitol to testify in person or stay in the Bahamas, where Bankman-Fried has been since his company filed for bankruptcy last month.

On Twitter, Bankman-Fried said he would "shed some light" on what he believes led to the demise of his company, as well as address the solvency of the U.S. subsidiary and his own "failings.”In his initial rejection of Waters' invitation to testify Dec. 13, Bankman-Fried on Sunday indicated he would wait until he had fully learned and reviewed what happened before appearing.

In the Dec. 13 hearing there will likely be several questions about whether FTX executives diverted customer funds to bad investments. In interviews over the past week, Bankman-Fried has discussed his role in the FTX collapse without disclosing how things went wrong or who was responsible. In fact, he seems to have admitted that cryptocurrency held by customers in accounts that should not have been available to FTX was commingled with other investors' assets on its main international exchange but not the company's U.S. operation. He has also blamed poor bookkeeping and financial controls.

Article Sources
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  1. Maxine Waters. Twitter. 6:07 PM · Dec 7, 2022

  2. Sam Bankman-Fried. Twitter. 6:05 AM · Dec 9, 2022

  3. Sam Bankman-Fried. Twitter. 6:05 AM · Dec 9, 2022

  4. Twitter. @SBF_FTX. 3:10 PM · Dec 4, 2022

  5. Reuters. “Sam Bankman-Fried Says He 'Didn't Ever Try To Commit Fraud.' "

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