The SBF was arrested ahead of a key congressional hearing on the monumental collapse of FTX. Here’s how to watch and what to expect
Sam Bankman-Fried, who is known as the SBF, was at the center of the business scandal of the year. His cryptocurrency exchange FTX suddenly exploded in November, sending millions of customers into disarray. Everyone wants answers — including Congress, where the SBF is expected to testify on Tuesday. In a shocking turn of events, he instead arrest on Monday night by the authorities in the Bahamas, where he is residing, in the request of the United States government.
With the SBF’s notable absence, the hearing is likely to bring some burning questions from lawmakers, including the US District Court’s investigation for the Southern District of New York leading to his arrest. It will likely create some awkward moments for members of Congress themselves, many of whom have get involved in the SBF’s failure network. Here’s what you need to know:
What time is the hearing and how can I watch it?
The hearing begins at 10 a.m. ET and will be streamed live by the House on YouTube and Broadcast directly on CSPAN 3.
Why is Congress holding this hearing?
After years of building a reputation as the golden child of the crypto industry, Sam Bankman-Fried has a Spectacular fall from grace in early November after his exchange, FTX, went bankrupt. Apparently, FTX is mixing client funds with its affiliated trading company, Alameda Research.
Now, as the SBF faces global investigations and criminal charges, Congress is seeking to find out how this incident happened and what it means for the industry. Cryptocurrencies are volatile at a time when legislators are debate law. Once caught, they will also want to investigate the criminal, although details about it are still being revealed.
Who is speaking?
When the SBF was detained, the only speaker left on the notebook was John J. Ray III, an American attorney who famously led failed energy company Enron through bankruptcy proceedings.
After SBF stepped down in mid-November, Ray took over as CEO of FTX. Ray has been scathing through court filings about the incompetence of the SBF and the previous executive team, declare that he had never witnessed “a complete failure of corporate control and complete lack of reliable financial information as has occurred here.”
Ray published his own plan to testifypresented devastating legal evidence that FTX and its affiliated trading company, Alameda Research, mixed up customer funds and lacked basic financial controls.
What will Ray be asked?
The biggest question facing FTX is whether the SBF can commit fraud by violating the exchange’s terms of service and mixing customer funds with Alameda Research’s trading bets—as well as extravagant spending of the empire, from political contributions arrive sponsor.
Expect questions from Ray about what really happened in FTX’s black box and how much SBF—the majority owner of both FTX and Alameda Research—knows what’s going on.
What fees does SBF face?
SBF is facing a lot of accusations, with the New York Times Report that criminal charges include wire fraud, wire fraud conspiracy, securities fraud, securities fraud conspiracy, and money laundering. The Securities and Exchange Commission also announced that it authorized separate charges for securities law violations.
If prosecutors decide to make an example of him, some attorneys have said look to the most notorious fraudster of the 2000s, Bernie Madoff, who sentenced up to 150 years in federal prison.
What is the relationship of the SBF with legislators?
The other nasty elephant in the room will be the former prominent stature of the SBF in Washington. As a major advocate for crypto regulation, SBF is the face of the industry in the capital, regularly meeting with legislators and regulators.
Following his departure, there will be investigations into the SBF’s political contributions and the extent to which he has shaped lawmakers’ views on the approach to crypto regulation.
Pro-crypto legislators at the hearing will likely criticize Gary Gensler, the chairman of the SEC, who Many people are responsible for failing to avert the FTX disaster—although much of the company’s business is overseas in Bahamas.
Will there be more hearings?
The Senate Banking Committee, chaired by Senator Sherrod Brown (D-Ohio), is scheduled to hold its own FTX hearing on Wednesday. Unlike the sparse lineup of the House Financial Services Committee, the Senate Banking Committee has four scheduled witnesses, including Ben McKenzie, crypto critic, OC actor, a move attracted some people. angry on cryptocurrencies Twitter. Messari founder Ryan Selkis was particularly furious:
The Senate Banking Committee has also asked the SBF to testify Threatened of the subpoena, which he refused. After the SBF was arrested, that was of course no longer relevant.
Waters said in a statement Monday night that she is disappointed that the SBF will not be able to testify and that the American public deserves to hear from him directly, leaving the door open to another hearing.
Why the House Financial Services Committee?
The Commission, led by Waters and Rating Member Patrick McHenry (RN.C.), is one of the most vocal on the need to enact crypto legislation. This includes draft for a stablecoin bill sponsored by Waters and McHenry, although they never officially introduced it.
With a change in House leadership and McHenry taking over as chairman, the House Financial Services Committee is expected to be the leader for The long-awaited crypto law in the next parliamentary session.
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