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Bankman-Fried, Reversing Course, Agrees To Testify To Congress Next Week

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Sam Bankman-Fried accepted an invitation to testify to Congress next week, forestalling possible subpoenas to compel him to do so, offering to discuss his view on what led to the collapse of his FTX cryptocurrency exchange early in November.

In a post on Twitter on Friday, the former CEO said he would “shed what light I can” on what he thinks led to “the crash” of his corporate empire, and would also address the solvency of its U.S. subsidiary, ways to “return value” to customers internationally, and his “own failings.”

A key line of questioning is likely to be whether FTX executives knowingly diverted customer funds to investments that had turned sour.

Last week, Maxine Waters, the California Democrat who chairs the House Financial Services Committee, invited Bankman-Fried to appear in front of her panel at a December 13 hearing. Bankman-Fried initially demurred, saying he wanted to finish “learning and reviewing what happened” before he would appear. On Wednesday, Sherrod Brown, the Senate Banking Committee chairman asked Bankman-Fried to testify at a December 14 hearing on FTX, and the Ohio Demcrat’s invitation was accompanied by the threat of a subpoena to compel his attendance.

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Waters subsequently said that a subpoena for her hearing “is definitely on the table.”

Bankman-Fried, who is in The Bahamas, has appeared in a string of interviews over the past week, discussing his role in the FTX collapse but being sparing with details of how his company ran into trouble and who was to blame. He has appeared to admit that customer holdings of cryptocurrency in accounts that were not supposed to be available to FTX were in fact commingled with other investors’ assets on the main international exchange, though not at its U.S. unit.

He also blamed poor bookkeeping and financial controls for the failure of deposits to reach FTX. Some investors were told to send investments to FTX’s associated Alameda Research, which he said did not transmit them to the exchange. He implied that those missing funds contributed to FTX’s inability to allow customer withdrawals last month, a contributing factor to the eventual filing for bankruptcy protection.

It is unclear if Bankman-Fried will travel to Washington or will appear by teleconference. All of his public appearances over the past two weeks have been over the Internet.



Source: Forbes

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