FTX Saga Continues as this Committee Chair Insists on Getting SBF’s Testimony

The story of the insolvent exchange, FTX, continues to gain momentum as more companies disclose their exposure to the platform. Sam Bankman-Fried, the central figure, has given numerous interviews to defend his actions.

The most recent conversation SBF had with a member of the House Committee, however, tipped the scales in favor of a ruling against SBF. The company’s likelihood of being investigated alongside SBF has increased significantly.

Maxine Waters, chair of the House Committee on Financial Services, has been vocal in her criticism of FTX’s former CEO Sam Bankman-Fried. After “learning and examining what transpired at the exchange,” SBF said he would consider testifying.

Waters also tweeted on December 6 that Bankman-Fried had all the facts she needed for her testimony. This could be deduced from his abundance of media appearances after the company’s bankruptcy.

Waters will preside over a hearing into FTX’s demise on the 13th of December. The committee has stated unequivocally that it wants to hear from Bankman-Fried and others involved in the collapse of the exchange.

It remains to be seen if SBF will respond to the summons, but it appears that the US legal system will be looking into the incident.

Australian Securities and Investments Commission head Joseph Longo said on 5 December that the defunct exchange used loopholes in the law to obtain a license in Australia. This testimony was presented to a joint parliamentary committee investigating the financial and business sectors.

Longo defended ASIC when asked how and why it had allowed FTX to obtain an AFSL under its watch. He claimed that ASIC was unable to take action and conduct thorough checks because of a defect in the governing framework.

FTX is said to have sidestepped the typical channels for acquiring an AFSL when it bought IFS Markets in December 2021. If reports from the Australian Financial Review are to be believed, the chairman also requested that this void be filled to prevent future occurrences.

SBF expanded on previous interview remarks regarding FTX’s crash and offered some new information. He answered “indirectly” when I asked if FTX had a Chief Financial Officer (CFO), implying that there wasn’t one. On the other hand, he reassured us that FTX US was still in a strong financial position and that investors might have reason to be optimistic.

SBF added that most of John Ray’s statements that were entered into the court record were untrue. He claimed that nobody from the current FTX team had reached out to him for clarification. To add insult to injury, he did not elaborate on whether or not investors were aware of Alameda’s FTX access.