The U.S. Congress Is Set For A String Of Hearings After The FTX Collapse

Binance To Liquidate FTX’s Token FTT Holdings “Due To Recent Revelations”
  • U.S. lawmakers are set to probe into the details surrounding the collapse of FTX.
  • The congressional hearing could see Binance CEO CZ and Sam Bankman-Fried make an appearance to give first-hand accounts.
  • Sam Bankman-Fried’s political donations in the past will not be able to insulate him from the pressure from lawmakers with some blowing hot about possible jail time.

FTX’s implosion has set off a Congressional hearing to unravel the circumstances that led to the collapse of the exchange but a rival is expected to give an account of its role in the fiasco.

The Financial Services Committee of the U.S. Senate is looking forward to meeting FTX founder Sam Bankman-Fried over the sudden collapse of the exchange. Part of the issues to be discussed are the widespread allegations of fraud and financial misappropriation circulating in the ecosystem.

The hearing is scheduled for a date in December, but it is unclear if Bankman-Fried will make the appearance. Rep Brad Sherman, a known crypto sceptic, expressed doubts on whether the FTX founder will appear before Congress.

“I assume that Sam Bankman-Fried is on a private submarine headed to Dubai, so I think that it’s going to be hard to get him unless Maxine has some depth charges,” said Sherman. “I think he’s fleeing justice, much less from committee testimony.”

The Securities and Exchange Commission (SEC) is expected to appear before the Committee to state its version of events. There are multiple reports of SEC Chair Gary Gensler meeting with Bankman-Fried months before the collapse and one question lawmakers might be asking is why the SEC missed the shady activities surrounding the firm amid its crackdown on the sector.

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Gensler has previously said that there is nothing inappropriate with his meetings with the embattled FTX founder because of his streak of regularly interfacing with industry professionals.

Binance is expected to appear

Lawmakers have expressed interest in the role played by Binance in the collapse of its rival. However, the company has repeatedly denied setting things in motion for FTX’s eventual implosion, noting that fraud and financial irregularities led to the collapse.

Changpeng Zhao, Binance CEO, said that he would not be sending a representative to the congressional hearing, hinting strongly at the possibility that he would be making an appearance in person. 

Binance was in the eye of the storm after it announced that it would be selling off its FTT tokens because of the revelation that it formed the bulk of Alameda’s holdings. The news tanked FTT’s price, however, Binance said it did not unload the tokens, but the dominoes had already started falling for FTX.