Top House Republicans scrutinize SEC investigation of failed crypto exchange FTX


Rep. Patrick McHenry, a Republican of North Carolina and ranking member of the House Financial Services Committee, speaks during a hearing in Washington, D.C.
Andrew Harrer | Bloomberg | Getty Images

Top House Republicans on Friday sent a letter to the Securities and Exchange Commission as Congress scrutinizes the agency’s actions against Sam Bankman-Fried, former CEO of failed cryptocurrency exchange FTX.

In a letter addressed to SEC Chairman Gary Gensler, Reps. Patrick McHenry, R-N.C., chairman of the House Financial Services Committee, and Bill Huizenga, R-Mich., chair of the oversight and investigations subcommittee, demanded records and communications among and between the SEC’s enforcement division, the Justice Department and Gensler’s office on the timing of the charges filed against Bankman-Fried for defrauding his investors and other violations.

Bankman-Fried was scheduled to testify before the committee on Dec. 13, a day after he was arrested by Bahamian officials. FTX filed for Chapter 11 bankruptcy protection and Bankman-Fried stepped down as its CEO in November. He was indicted in New York federal court on Dec. 9 and arrested three days later ahead of extradition to the U.S.

Current FTX CEO John Ray testified alone in Bankman-Fried’s absence.

The committee’s request comes a week after McHenry announced the panel will examine certain so-called overreaches by financial oversight agencies.

“Presumably, the SEC’s Division of Enforcement did a complete investigation into the actions by Sam Bankman-Fried and presented the findings to the Commission for its review and to authorize the charges,” the letter states. “Yet, the timing of the charges and his arrest raise serious questions about the SEC’s process and cooperation with the Department of Justice.”

The Financial Services Committee requested communications between the SEC’s enforcement division, specifically its director, Gurbir Grewal, communications among Gensler’s direct staff, and records and communications between the SEC and the Justice Department over the last few months by 5 p.m. on Feb. 23.

An SEC spokesperson said Friday that “Chair Gensler will respond to Members of Congress directly, rather than through the media.”

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