FTX founder Sam Bankman-Fried is expected to appear before Congress next month, with California Representative Maxine Waters co-leading the investigation against him as chairwoman of the House Financial Services Committee. The only problem is Waters has a clear history with the young entrepreneur, to include working with him as lawmakers discussed the “future of digital assets” in December of 2021.
A video is circulating on social media that shows what appears to be Waters blowing a kiss to 30-year-old Bankman-Fried as he exits the House chambers, although that kiss could also be directed to a woman walking in front of him.
FTX has recently declared bankruptcy due to a series of risky and poor investments through their trading firm Alameda Research, resulting in the loss of billions of dollars. Bankman-Fried and several roommates, to include, allegedly, Alameda Research CEO Caroline Ellison, who is said to have dated Bankman-Fried off and on, fled the country to a “luxury penthouse” in the Bahamas, where he was spotted last weekend.
“The whole operation was run by a gang of kids in the Bahamas,” according to a current or former employee of FTX or Alameda, who spoke with CoinDesk on the condition of anonymity. “It’s been radio silence from Sam.”
Bankman-Fried was a major Democratic donor, second only to George Soros, donating approximately $50 million to Democratic candidates since 2020.
Recently, allegations have begun circulating that through FTX, Bankman-Fried was laundering money being “sent” to the Ukraine war effort, turning it into campaign donations for Democratic candidates in this year’s midterm elections, to the tune of almost $40 million.
“FTX is converting crypto contributions to Ukraine’s war effort into fiat [paper money of a country] for deposit at the National Bank of Ukraine,” CoinDesk wrote in March of this year. This was a part of their “multimillion-dollar effort to turn bitcoin into bullets, bandages and other war materiel” under the Aid for Ukraine program. The March article read, “The country’s collective efforts have already raised some $48 million in bitcoin (BTC), DOT, ether (ETH), SOL, tether (USDT) and other cryptocurrencies, according to the website. Other estimates place the amount closer to $100 million, but totals vary with market swings and exactly which websites are included.”
Bankman-Fried testified in December of 2021 in front of the House Financial Services Committee several themes of his offering “insights into the digital-asset industry,” specifically regarding FTX.
“FTX empowers the individual investor and consumer because we offer products that are easily accessible and inexpensive, so investors and consumers can make simplified choices to achieve their economic goals,” he said at the time. “FTX has designed and offered a platform with a market structure that is risk reducing. FTX already is subjected to U.S. federal regulatory supervision of the highest standards, including that of the U.S. Commodity Futures Trading Commission (CFTC) and the U.S. Department of Treasury, as well as stringent supervision by other global and state regulators.”
Following the downfall of FTX, Waters said, “The fall of FTX has posed tremendous harm to over one million users, many of whom were everyday people who invested their hard-earned savings into the FTX cryptocurrency exchange, only to watch it all disappear within a matter of seconds. Unfortunately, this event is just one out of many examples of cryptocurrency platforms that have collapsed just this past year.”
In a statement, the ranking member of the House Financial Services Committee, North Carolina Republican Patrick McHenry, said, “Oversight is one of Congress’ most critical functions and we must get to the bottom of this for FTX’s customers and the American people. It’s essential that we hold bad actors accountable so responsible players can harness technology to build a more inclusive financial system.”