The case of the collapse of FTX gained new controversy after a tweet written by Tom Emmer, a US congressman. According to the message, Emmer points to possible “dubious ties” between US Securities and Exchange Commission (SEC) Chairman Gary Gensler and Sam Bankman-Fried (SBF), now former CEO of FTX. In this sense, the deputy points out that Gensler would be helping SBF and FTX to “work in legal loopholes to obtain a regulatory monopoly”. That is, privileging the exchange over its competitors operating in the US. “Interesting. Gary Gensler rushes to the media as reports to my office allege he was helping SBF and FTX work through legal loopholes to gain a regulatory monopoly. We are investigating this.” said the congressman on Thursday (10). In his message, Emmer cites a tweet written by Gensler on the same day, where the SEC chairman says he will discuss developments in the cryptocurrency market. In fact, Gensler spoke to CNBC and said that exchanges utilize a “toxic mix”. “One of these players had the toxic combinations of lack of publicity, client money, too much leverage (loan). Then he tried to invest with it. But when the markets turned against them, it looks like a lot of customers lost money,” Gensler said. This Friday (11), as reported by CriptoFácil, FTX filed for bankruptcy protection, the famous Chapter 11 of US law.
Users criticize FTX/SEC relationship
After Emmer published his tweet, the cryptocurrency community questioned the relationship between Gensler and SBF. In most comments, people labeled this relationship as “dark”. Other people alluded to the list of “regulations” that the SBF released at the end of October. The document received strong criticism at the time, with YouTuber BitBoy claiming that the former CEO of FTX wanted to “destroy cryptocurrencies”. Now, speculation within the community is that SBF wrote those proposals to control the market. Some have also speculated that the SEC chairman was influenced by relationships from his time at the Massachusetts Institute of Technology (MIT). The HR Cult profile stated that Gensler’s boss at MIT was the father of Caroline Ellison, CEO of Alameda Research. Additionally, SBF met with Gensler earlier this year, which prompted the community to look into their donations to politicians. Delphi Digital’s general counsel, Gabriel Shapiro, labeled the money FTX spent as “political bribes.” Jake Chervinsky, an attorney specializing in cryptocurrencies, said FTX was close to striking a deal with the financial regulator, which would set a harmful precedent for its competitors. Then Chervinsky claimed that FTX reportedly spent $40 million on “political bribes”. Meanwhile, reports have revealed that US lawmakers are moving forward with the SBF-backed bill, which increases oversight over the cryptocurrency market. Several cryptocurrency industry leaders criticized the bill.
SEC allegedly investigates SBF
Bloomberg News reported that after the collapse of FTX, the SEC opened an investigation against SBF and the company. According to the news, the aim is to find out if the former CEO and his companies violated securities regulations. The regulator also wants to examine SBF’s role in FTX’s recent liquidity crisis. He added that the SEC was also investigating whether the US branch (FTX.US) and its cryptocurrency lending activities violate the law. FTX is under intense regulatory scrutiny after its implosion. US regulators are investigating the relationship between SBF’s numerous deals and whether the cryptocurrency exchange mishandled customer funds.
