Dem Rep Demands Investigation Into FTX ‘Regulatory Failings’ After Raking In Donations From Its Disgraced Ex-CEO

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FILE PHOTO: Illustration shows FTX logo and representation of cryptocurrencies

Dem Rep Demands Investigation Into FTX ‘Regulatory Failings’ After Raking In Donations From Its Disgraced Ex-CEO

John Hugh DeMastri on December 7, 2022

Democratic Rep. Ritchie Torres of New York, whose campaign received a combined $40,300 in donations from Sam Bankman-Fried, ex-CEO of FTX, and his brother Gabriel, wrote a letter Tuesday calling on the Government Accountability Office (GAO) to investigate the U.S. Securities and Exchange Commission (SEC) for failing to properly regulate the crypto exchange.

Torres was one of eight members of Congress to sign a March 16, 2022, letter questioning the SEC’s authority to request the voluntary disclosure of certain information by cryptocurrency companies, such as FTX. Roughly two weeks prior, on March 4 and March 6, Gabriel Bankman-Fried donated more than $31,000 to Torres For CongressTorres Victory Fund and the Torres-affiliated La Bamba PACaccording to the Federal Election Commission, while Sam Bankman-Fried hosted a fundraiser for Torres in April, according to The Intercept.

Torres told the Washington Examiner earlier this month he had donated the $2,900 his campaign received from Sam Bankman-Fried “to a local charity to assist with holiday food distributions to families in need.”

The SEC had, prior to the March letter, asked several crypto exchanges to offer more details about how they were managing customers’ deposits, specifically asking if they were offering interest — which would make them eligible for regulation by the SEC — or using customers’ money for loans or other operational purposes, according to Reuters. As of May, internal documents from FTX showed that the SEC was primarily concerned with its rewards program, which offered interest on some crypto deposits, and that the company had confirmed to regulators that the program did not “involve lending,” according to Reuters.

In November, allegations that Bankman-Fried and FTX knowingly used over $10 billion worth of customers’ assets to engage in risky trades prompted a slew of renewed federal investigations ranging from the SEC to Manhattan-based U.S. attorneys. Amid a class-action lawsuit accusing Bankman-Fried and several celebrity FTX endorsers of fraud, Bankman-Fried has reportedly retained lawyer Mark Cohen, a former federal prosecutor who represented Ghislaine Maxwell against charges that she conspired with Jeffrey Epstein to engage in sex trafficking and sexual assault.

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“The SEC chose to dedicate scarce time and resources to investigating Kim Kardashian, rather than opaque crypto exchanges, leaving many to question whether the commission is operating efficiently and apolitically and whether it has its priorities in the right place,” said Torres, referencing an October settlement between the SEC and Kardashian over her promotion of a crypto asset. “If the SEC had done the due diligence of thoroughly investigating the financials of FTX, there would have been a greater likelihood of exposing the crypto exchange for what it truly is: a house of cars [sic] built on monopoly money printed out of thin air.”

The SEC and Torres’ office did not immediately respond to a request for comment.

Dem Rep Demands Investigation Into FTX ‘Regulatory Failings’ After Raking In Donations From Its Disgraced Ex-CEO

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