US lawmakers question SEC chair on timing of Sam Bankman-Fried's arrest

Published at: Feb. 10, 2023

Two members of the United States House Financial Services Committee are calling on Securities and Exchange Commission chair Gary Gensler “regarding the timing of the charges filed against FTX founder Sam Bankman-Fried” based on his scheduled appearance at a hearing.

In a Feb. 10 notice, committee chair Patrick McHenry and Representative Bill Huizenga, who chairs the Oversight and Investigations Subcommittee, said the timing of Bankman-Fried’s charges and arrest in the Bahamas raised “serious questions about the SEC’s process and cooperation with the Department of Justice”. The two lawmakers called on Gensler to provide records and communications from the SEC’s Division of Enforcement, his office, and between the agency and the Justice Department related to SBF's charges from Nov. 2 to Feb. 9.

Bankman-Fried had been scheduled to testify before a House Financial Services Committee hearing on Dec. 13 exploring the collapse of crypto exchange FTX. However, the former FTX CEO was arrested in the Bahamas in accordance with an extradition agreement with the United States. The Justice Department charged Bankman-Fried with eight criminal counts including wire fraud, while the SEC and the Commodity Futures Trading Commission have filed separate civil suits against the former CEO.

“Since Gary Gensler won't abide by his own polices [sic] to ‘come in and talk’, the House GOP will hold him accountable,” said Huizenga in a Feb. 10 tweet.

Since @garygensler won't abide by his own polices to "come in and talk”, the House GOP will hold him accountable. Today, as promised, our oversight of the @SECGov begins with a request for documents surrounding their interactions with @SBF_FTX, @FTX_Official, and @TheJusticeDept pic.twitter.com/cQ9L66I0t5

— Rep. Bill Huizenga (@RepHuizenga) February 10, 2023

McHenry and Huizenga requested Gensler provide the information no later than Feb. 23. The SEC chair faced additional scrutiny this week following the agency announcing a settlement with Kraken in which the exchange agreed to stop offering staking services or programs to U.S. clients.

With Bankman-Fried’s absence, FTX CEO John Ray was the sole witness at the December committee hearing, but the Senate Banking Committee also probed FTX’s “bubble burst” in its own hearing on Dec. 14. The banking committee has scheduled an additional hearing on the “crypto crash” of 2022 to occur on Feb. 14.