SEC FTX Probe: In a new development around the US SEC’s probe on FTX collapse, the U.S. House Committee on Financial Services Republicans raised serious concerns about the way the matter was handled. In what could go down as a huge remark against Gary Gensler‘s SEC, the committee chairman Patrick McHenry sought all records and communications from the agency about the ongoing investigation. “The American people transparency from you and your agency,” the chairman said. The House committee chairman asked for the records to be submitted in two weeks time.
FTX Probe’s Timing
According to a letter from Chairman McHenry to the SEC Chair, this view stemmed out of the timing of the charges and Sam Bankman-Fried‘s arrest. The letter also noted that the financial services committee has jurisdiction to oversee the SEC’s activities as per US laws. Accordingly, the SEC was asked to submit all records and communications related to the charges on FTX co-founder Sam Bankman-Fried since November 2022, when FTX’s liquidity issues came into light. Communications made from the office of Gensler in the same period were also sought.
“The timing of the charges and his arrest raise serious questions about the SEC’s process and cooperation with the Department of Justice.”
The Bahamas authorities arrested Bankman-Fried on December 12, 2022, which was just a day before the Committee held a hearing on the FTX collapse. The SEC had on the same day announced charges against the FTX co-founder citing ‘concealing his diversion of FTX customer funds’. However, it was the timing of SEC’s charges after the arrest that is concerning the committee.