On November 23, U.S. Senators Sheldon Whitehouse (D-RI) and Elizabeth Warren (D-Mass.) sent a letter to the U.S. Justice Department urging the prosecution of former FTX CEO Sam-Bankman Fried “and any complicit FTX executives” to the fullest extent of the law.
According to the senators’ letter, FTX’s abrupt collapse sent shockwaves through the industry, and its effects on ordinary investors are even more worrisome.
They said that by paying for expensive ad spots and celebrity endorsements, FTX fostered a false sense of security and respectability, encouraging investors to put their hard-earned money into the exchange.
Whitehouse is a member of the Senate Judiciary Committee, while Warren is a member of the Senate Banking Committee.
In the days preceding the collapse, Bankman-Fried (SBF) made an effort to conceal liquidity difficulties, which became evident when clients tried unsuccessfully to withdraw their accounts.
The senators stated that SBF and other executives’ deliberate and dishonest actions to further their own financial gain appear to have been the cause of FTX’s failure rather than careless business practices.
The senators noted that as the matter develops, additional information will clarify how FTX’s consumers were damaged and may show issues with the crypto sector as a whole that go beyond FTX.