Financial services chair maxine waters recently invited sam bankman-fried, the former ceo of ftx, to testify before the committee on december 13. ftx was a cryptocurrency derivatives trading platform that went bust due to mismanagement at the top. the crash of ftx has prompted u.s. lawmakers to try and figure out how to regulate the fast-moving and complex world of cryptocurrencies.
Invitation by maxine waters came after bankman-fried made a public appearance at the new york times’ annual dealbook summit, gave an interview on good morning america, and held a twitter spaces attended by more than 39,000 people. the crash of ftx occurred in early november, and since then the u.s. securities and exchange commision, the department of justice, and regulators in several u.s. states have been investigating bankman-fried.
Went bust largely because of mismanagement at the top, as the company allegedly used customer cash to make bets on another platform set up by bankman-fried, trading house alameda research. alameda may have had an unfair advantage when trading against ftx users, as it had “secret exemptions” from liquidations on ftx. despite this, alameda still lost billions when the contents of alameda’s balance sheets came to light and ftx customers wanted out, leading to a bank run and the exchanges’ collapse. billions of dollars of clients’ money went up in smoke and a lot is still missing after it was unexplainably sucked out of the exchange the night the company filed for bankruptcy.