NC’s Patrick McHenry to lead congressional hearings into FTX collapse | Eastern North Carolina Now

    Publisher's Note: This post appears here courtesy of the Carolina Journal. The author of this post is David Larson.

    This week, ranking member of the House Financial Services Committee, Congressman Patrick McHenry, R-NC, announced that he and current Chair Maxine Waters, D-CA, were planning on holding bipartisan hearings into the demise of FTX, a cryptocurrency giant. McHenry will likely soon be taking over as chair of the committee after Republicans secured a majority in the U.S. House, growing his authority over this and other similar investigations.

    "Chairwoman Waters and I are announcing a House Financial Services Committee hearing on the FTX debacle," McHenry said in a press release. "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. I appreciate Chairwoman Waters' working with Republicans to deliver accountability through a bipartisan process."

    The two committee leaders said the bipartisan effort would focus on the "broader consequences" for cryptocurrencies and would "expect to hear from" Sam Bankman-Fried and his connected colleagues and companies.

    Bankman-Fried allegedly lived in a mansion in the Bahamas with other young leaders of the company, who spent their time engaged in a 10-person "polycule" relationship and even experimented with "Chinese harem polygamy."

    The group also held utopian visions of how they would save the world through their philosophy of "effective altruism." Part of this altruistic worldview apparently involved making major donations to the Democratic Party.

    NBC reports that Bankman-Fried donated about $40 million to candidates in this cycle, almost exclusively to Democrats, earning the place of second-biggest Democrat Party donor.

    Waters, who will help run the investigation with McHenry, deflected questions about Bankman-Fried's donations to left-wing candidates and groups, telling FOX Business that she "didn't want to get into that" and that "both sides" got money.

    FTX's flimsy foundations became clear after interest rates quickly rose. Cryptocurrencies in general took a hit, but FTX's strategy of propping up risky investments by using a currency they created themselves, suspected to have little inherent value, caused major investors to sell. Now, millions of other investors are left holding the bag for the company's alleged missteps.

    At an initial hearing on the matter, McHenry told his colleagues, "There is no sugarcoating it. The collapse has been a dumpster fire. Users left out to dry. Ecosystem in limbo."
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