Disgraced former crypto billionaire Sam Bankman-Fried developed deep ties with regulators he wanted to oversee the crypto industry, emails reportedly show.
Bankman-Fried hired multiple former regulators at the Commodities Futures Trading Commission (CFTC) to staff his legal team at FTX, his Bahamas-based crypto exchange. They helped him develop relationships with top CFTC officials and other regulators, according to the LA Times.
Sam Bankman-Fried cultivated extensive ties to regulators at one of the agencies leading his prosecution. @freddy_brewster has the emails. https://t.co/fr0iEFXZ2H
— Jeff Bercovici (@jeffbercovici) December 26, 2022
FTX general counsel Ryne Miller, former legal counsel to then-CFTC Commissioner and current SEC Commissioner Gary Gensler, arranged a meeting between Bankman-Fried and SEC general counsel Dan Berkovitz, LA Times reported. Berkovitz announced his resignation from the SEC Dec. 22, the same day the LA Times asked questions about his role.
Months earlier, former FTX head of policy and regulatory director Mark Wetjen arranged a meeting with CFTC Chair Rostin Behnam and his chief of staff to discuss FTX affiliate LedgerX, LA Times found.
Behnam testified to the Senate Agriculture Committee Dec.1 he met with Bankman-Fried and his team 10 times about LedgerX, in response to a question from GOP Sen. Chuck Grassley of Iowa 90 minutes into the hearing.
Bankman-Fried was a proponent of the Digital Commodities Consumer Protection Act (DCCPA), a bipartisan bill to give the CFTC more oversight over the crypto industry. FTX lobbied for the bill more than any other legislation in 2022, according to campaign finance watchdog OpenSecrets.
Bankman-Fried testified to the Senate Agriculture Committee Feb. 9 about his “vision for the CFTC as a digital-assets market regulator for the U.S,” in a hearing about digital assets. (RELATED: REPORT: Progressive Activist Tied To Sam Bankman-Fried Allegedly Had Backchannel To Biden Officials)
Campaign finance records show Bankman-Fried donated to Democratic Sen. Debbie Stabenow of Michigan, DCCPA author and Agriculture Committee Chair. He also donated to GOP Sen. John Boozman of Arkansas, Agriculture Committee Ranking Member and co-sponsor of the bill, records show.
LedgerX is now up for sale in the wake of FTX filing Chapter 11 bankruptcy Nov. 11, Bloomberg reported. The platform is registered with the CFTC as a derivatives trading exchange but it did not receive the clearinghouse application Bankman-Fried pushed for with the CFTC, LA Times said.
Bankman-Fried was indicted Dec. 13 on eight counts of fraud and conspiracy by federal prosecutors. He received similar charges from the CFTC involving alleged misused customer funds by FTX and sister hedge fund Alameda Research.
According to the CFTC filing, “Bankman-Fried and other FTX executives also took hundreds of millions of dollars in poorly-documented ‘loans’ from Alameda that they used to purchase luxury real estate and property, make political donations, and for other unauthorized uses.”
Bankman-Fried was released from custody and sent back to his parents’ house on a $250 million bond Dec. 22. His net worth peaked at $26.5 billion and was estimated at $17.2 billion in September 2022, according to Forbes Magazine.
He told Axios he had less than $100,000 left in his bank account the last time he checked.