U.S. Congressman Tom Emmer doesn’t believe that the arrest of FTX founder Sam Bankman-Fried (SBF) – which allowed him to miss a scheduled congressional hearing on December 13 – was purely due to good fortune. Rather, the politician suspects that the arrest was “purposeful,” due to Bankman-Fried’s various connections and information. Centralized Failure Speaking with Nicholas Carter during the On the Brink podcast published on Tuesday, Emmer stressed that FTX’s failure was a failure of centralized finance, rather than decentralized tech. “The only difference between this and financial fraudsters from the beginning of time is we’ve now moved into digital assets,” he said. The congressman shifted the blame toward the Securities and Exchange Commission (SEC), a regulator
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U.S. Congressman Tom Emmer doesn’t believe that the arrest of FTX founder Sam Bankman-Fried (SBF) – which allowed him to miss a scheduled congressional hearing on December 13 – was purely due to good fortune.
Rather, the politician suspects that the arrest was “purposeful,” due to Bankman-Fried’s various connections and information.
Centralized Failure
Speaking with Nicholas Carter during the On the Brink podcast published on Tuesday, Emmer stressed that FTX’s failure was a failure of centralized finance, rather than decentralized tech. “The only difference between this and financial fraudsters from the beginning of time is we’ve now moved into digital assets,” he said.
The congressman shifted the blame toward the Securities and Exchange Commission (SEC), a regulator responsible for providing safeguards in the Tradfi world. The agency, he argued, was “asleep at the wheel” with FTX, and possibly complicit with the fraud.
Politicians and regulators were quick to act on FTX and Bankman-Fried only after the bankruptcy took place early last month. The SEC and Commodities and Futures Trading Commission (CFTC) jointly charged Bankman-Fried with fraud in December, while the Senate held a hearing on the exchange’s collapse with FTX’s bankruptcy lawyer, John Ray, on December 13th.
Conspiracy to Arrest SBF?
Bankman-Fried was also supposed to attend the hearing, but was jailed by Bohemian authorities at the Department of Justice’s request just one day ahead of time. He is still due to be extradited to the United States.
Nevertheless, Emmer found his arrest, and opportunity to avoid the hearing, a little too convenient. He believes a range of parties may have wanted to keep him from speaking before congress, including Bahamian regulators.
“The speed with which this indictment apparently moved at… it’s an unusual speed that it moved at by any account,” said Emmer. “You talk to anyone in the prosecution business. They’ll tell you that this really went in a much faster fashion than most of these that they have ever seen out of the Southern District of New York.”
Emmer was also suspicious of how residents in the Bahamas were prioritized when reimbursing customers, and how Bohemian regulators reportedly asked SBF and FTX to mint $300 million in new crypto.
The congressman was particularly hard on SEC chairman Gary Gensler, who spent months speaking with SBF prior to FTX’s collapse.
“Why wasn’t he doing his job? Why wasn’t the SEC doing the oversight? he asked.