Lawmakers Probe SEC Over Strange ‘Timing’ Of Democrat Megadonor, Alleged Fraudster Sam Bankman-Fried’s Arrest | Eastern NC Now

    Publisher's Note: This post appears here courtesy of the The Daily Wire. The author of this post is Ben Zeisloft.

    House Republicans asked for any communications about the arrest of former FTX CEO Sam Bankman-Fried sent by officials in the Securities and Exchange Commission.

    Bankman-Fried has been charged with several counts of fraud after he allegedly commingled assets between FTX and sister trading company Alameda Research without customers' knowledge. The entrepreneur was arrested on December 12, hours before he was scheduled to testify before the House Financial Services Committee over misconduct at his firm. Rep. Patrick McHenry (R-NC) and Rep. Bill Huizenga (R-MI), the top Republicans on the committee, wrote in a letter to SEC Chair Gary Gensler that the "timing of the charges and his arrest raise serious questions about the SEC's process and cooperation with the Department of Justice."

    Authorities in the Bahamas, where FTX had been headquartered, arrested Bankman-Fried after they were notified that the United States had filed criminal charges against the executive. Current FTX CEO John Ray III, an attorney overseeing the company's bankruptcy, testified before Congress in his stead. McHenry and Huizenga asked for "all records and communications" to and from SEC Division of Enforcement Director Gurbir Grewal and other staffers "referring or relating to the charges filed against Sam Bankman-Fried" by February 23.

    Bankman-Fried pleaded not guilty last month to eight charges, which include conspiracy to commit wire fraud, conspiracy to commit securities fraud, and conspiracy to commit campaign finance violations. He faces as much as 115 years in prison.

    The disgraced mogul's extensive political connections came to light in the weeks after his company's bankruptcy, including the $39 million he donated to Democrats ahead of the midterm elections and four meetings he was granted at the White House with senior advisers Steve Richetti and Bruce Reed. Bankman-Fried was also the second-largest donor to the campaign which would eventually grant former Vice President Joe Biden control of the White House.

    A previous analysis of Federal Election Commission data published by Coindesk found last month that 196 of the 535 members of the House and Senate received donations from Bankman-Fried and his associates. FTX announced on Sunday that the company would begin sending "confidential messages to political figures, political action funds, and other recipients of contributions" made by the company's former executives.

    The letter from House Republicans comes shortly after Gensler and other senior regulators unveiled a number of enforcement actions against cryptocurrency firms. The agency announced that cryptocurrency exchange Kraken would pay a $30 million settlement for failing to register its staking-as-a-service initiative, under which retail investors are reimbursed for holding certain digital assets, while a report revealed that stablecoin issuer Paxos is currently under investigation from the New York Department of Financial Services.

    The charges against Bankman-Fried and untold losses from FTX customers have prompted lawmakers to consider new regulations for the nascent industry. Members of the Senate Agriculture Committee recently held a hearing with Commodity Futures Trading Commission Chairman Rostin Behnam on increasing federal oversight of the sector.

    "For years many have recognized that a patchwork of federal and state-based regulation is an unsuitable substitute for a comprehensive approach," the official remarked. "We are here today because many Americans invested in a novel product and will likely lose money because digital asset markets lack the basic protections that we have all come to expect and have made American financial markets the envy of the world."