There was a time when the founder of the failed FTX exchange was the talk of the town. New emails show how the 30-year-old ex-FTX CEO used former regulatory officials as a way to get closer to U.S. agencies.
Emails show that Ryne Miller, FTX's general counsel, used old contacts with regulators to get Bankman-Fried a seat at the dinner table. Emails obtained by the LA Times show that the October 2021 meal was at a high-end restaurant in Washington DC.
Gary Gensler was the chairman of the Securities and Exchange Commission when Miller worked for him. Miller came onto FTX after working as an attorney for Sullivan & Cromwell. Miller paid Berkovitz $50 for his portion of the dinner.
Mark Wetjen, a former chairman and commissioner of the Commodity Futures Trading Commission, was also at the dinner. The CEO of the company was promised a seat. One of the few solvent pieces of Bankman-Fried's formercryptocurrencies is the FTX-affiliate LedgerX. LedgerX was put up for sale after FTX and many of its affiliates filed for Chapter 11.
Miller tried to get theCFTC commissioner to attend the dinner, but reports could not confirm if she actually showed up. She is now an advisor for Solidus Labs, so you won't find her there.
A door that had been spinning so fast it was enough to make your head spin was between U.S. financial regulators andcryptocurrencies. There are former officials from the U.S. treasury department, the SEC, and more coming into the likes of a16z.
The SEC and the CFTC have both filed civil complaints against Sam Bankman-Fried. The FTX founder is accused of committing fraud by allowing an unlimited line of credit between the exchange and his sister company. Regulators alleged that the founder was still in control of both FTX and Alameda even though he claimed they were separate entities.
We didn't hear back from the CFTC after we contacted them. Berkovitz is the general counsel for the SEC. The SEC declined to comment on Berkovitz' role with the SEC complaints against Bankman- Fried.
During a recent hearing with the U.S. Senate Agriculture Committee, the current chairman of the Commodity Futures Trading Commission tried to argue that his agency was the most capable of regulating the entire industry. He said his agency met with FTX officers 10 times and that all of them were about creating a clearing house. He praised LedgerX because it was regulated.
The regulators who were supposed to protect users and investors from the worst of the crypto bros are now forced to do so after the industry showed its ugliest side. That doesn't help the investors who have collectively lost billions of dollars in this year'scryptocurrencies market.
All Rights Reserved © 2024
