U.S. Senators Elizabeth Warren (D-Mass.) and Sheldon Whitehouse (D-R.I.) wrote to the U.S. Justice Department on Nov. 23 to call to hold former FTX CEO Sam Bankman-Fried (SBF) “and any complicit FTX executives” to the fullest extent of the law.
See related article: US senators urge Fidelity to drop BTC retirement plan after FTX collapse
Fast facts
- The senators wrote that FTX’s swift collapse created shockwaves across the industry, and the impact of the collapse on retail investors is even more alarming.
- They said FTX created a false sense of safety and legitimacy, and encouraged investors to invest their hard-earned money with the exchange through costly advertisement placements and celebrity endorsements.
- Warren is a member of the Senate Banking Committee, and Whitehouse sits on the Senate Judiciary Committee.
- SBF attempted to downplay concerns over liquidity in the days leading up to the collapse, which became clear when customers unsuccessfully attempted to withdraw their deposits.
- The senators added FTX’s collapse was not a result of sloppy business practices but appears to have been caused by intentional and fraudulent tactics employed by SBF and other executives to enrich themselves.
- As the situation unfolds, new facts will shed light on how FTX’s customers were harmed and could reveal problems with the crypto industry that extend beyond FTX, the senators wrote.
- See related article: At FTX’s first bankruptcy hearing, lawyer calls out ‘substantial amount’ of missing, stolen assets